In the 1980’s there was a plethora of litigation against banks claiming unfair collection practices. Borrowers would often claim that the bank made promises to extend credit or change the terms of a loan but would break the promise.

The lawsuits added to the costs of commercial lending because it created uncertainty with regard to the liability of participating banks. Accordingly, the Florida legislature engineered Statute 687.0304. This statute bars anyone from filing a case relying upon an alleged oral credit agreement.

In order to have an enforceable agreement against a bank the agreement must be (1) in writing; (2) express consideration; (3) set forth relevant terms and conditions; and (4) must be signed by both the bank and the borrower.*

Therefore, if you have negotiated with a bank manager that the bank will not foreclose, call the loan in default or seek default interest, attorneys fees or costs, the agreement is not binding unless an agreement is written and signed.

The statute has been tested in appellate courts and has survived judicial scrutiny.

In the final analysis, unless there is a written document there is no agreement with a bank.

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