A principal hired a mortgage banking firm to obtain a loan commitment of $10,000

Question

A principal hired a mortgage banking firm to obtain a loan commitment of $10,000,000 from an insurance company for the construction of a shopping center. The firm was promised a fee of $50,000 for obtaining the commitment. The firm was successful in arranging for the loan, and the insurance company, without the principal’s knowledge, agreed to pay the firm a finder’s fee. The principal then refused to pay the firm the promised $50,000, and the firm brought suit to recover the fee. May the firm recover the fee? Why?

Explanation / Answer

yes, the firm can recover the fee. because if the banking firm agrees to grant a loan to the insurance firm. and if they met the requirements, the insurance firm is agreed to pay $50,000. so, it has to pay to the mortgage banker. he may take assistance of other firm or other party, it is not required to the insurance firm. the insurance firm has to deliver what it promises to the banker.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.