stating that “a contract cannot be enforced by a” nonparty
How later courts described this case
- stating that “a contract cannot be enforced by a” nonparty
- "Whether the parties reached the necessary agreement as to the term depends upon the parties' expression of intention."
- “The elements of an enforceable contract, ‘offer,’ ‘acceptance’ and ‘consideration’ are present: The [plaintiffs] offered to borrow money, the bank accepted their offer by processing the loan, and the [plaintiffs] provided consideration by paying the bank a loan origination fee.”
- valid loan contract existed between borrower and lender, where borrower offered to borrow money, lender accepted offer by processing the loan, and borrower provided consideration by paying lender’s loan fee
Written by the judges who cited it.
The opinion
CANE, P.J.
(dissenting). I disagree with the majority's conclusion. The bank accepted a fee from the Goossens to process a WHEDA loan and it failed to do it properly. Whether it is labeled negligence or breach of contract, the fact is that the WHEDA loan required the *253 bank in this loan process to have the home's septic system inspected and the bank failed to do so. Had the bank done its duty of properly processing the WHEDA loan, the home's septic system would have been inspected as required and the defect would have been easily discovered. However, now the Goossens are required to finance not only the home, but also the additional cost of replacing the defective septic system.
I specifically reject the majority's characterization that inspecting the septic system was an agreement only between the bank and WHEDA. In proper context, the inspection was the bank's duty or obligation as part of the loan process. For example, when contracting with a builder, plumber or electrician, the owner does not know all of the code requirements or the specific details of the work required in accomplishing the task. The owner rightfully expects that the work will be done in accordance with the code, although he may not be aware of its specific requirements. The builder, plumber or electrician must be aware of the requirements and comply with them as part of their duty or obligation in the agreement. When they build a home, install the plumbing or do the electrical wiring, but fail to comply with the code, they then are liable for the harm to the owner.
Here, the customer applying for a WHEDA loan should not be compelled to be aware of all the regulations and nuances of the WHEDA requirements. That is the bank's obligation when it accepts a fee to process this loan. When it fails to meet these duties and the customer is harmed as a result of the bank's breach or negligence, liability results. Here, the bank's liability is the Goossens' cost of replacing the defective septic system, a cost the Goossens would not have incurred had *254 the bank complied with its duty to properly process the WHEDA loan.
Therefore, I would affirm the judgment.