BONDAGE, DOMINATION, AND THE ART OF THE DEAL - AN ASSESSMENT OF JUDICIAL STRATEGIES IN LENDER LIABILITY GOOD FAITH LITIGATION

In the 1980s the contractual obligation of good faith and fair dealing achieved preeminence in the area of lender liability. This raised con cerns that expansive judicial interpretation of the obligation would, in effect, rewrite the parties' contracts and result in the imposition of undue economic liability upon lenders. In this Article Professor O ver by first traces the statutory, common law, and theoretical attempt s to provide transactors with legal standards of conduct through the o bligation of good faith. She then examines the judicial approaches to good faith in the lending context, rejecting as unfounded concerns ove r economic liability or widespread judicial activism. Professor Overby demonstrates that the underlying divergence in the courts over proper interpretation of the obligation of good faith is the primary cause o f the ''lender liability crisis. '' Finally, the Article proposes an ' 'effectiveness of express terms'' approach to good faith lending under which the obligation of good faith in no way overrides the explicit t erms of the lending agreement absent proof of opportunism.