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18. Does the developer have a cause of action against the lender?
A developer obtained a bid of $10,000 to tear down her old building and another bid of $90,000 to replace it with a new structure in which she planned to operate a sporting goods store. Having only limited cash available, the developer asked a lender for a $100,000 loan. After reviewing the plans for the project, the lender in a signed writing promised to lend the developer $100,000 secured by a mortgage on the property and repayable over 10 years in equal monthly installments at 10% annual interest. The developer promptly accepted the demolition bid and the old building was removed, but the lender thereafter refused to make the loan. Despite diligent efforts, the developer was unable to obtain a loan from any other source.
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A is incorrect. An offer is the manifestation of willingness to enter into a bargain, so made as to justify the offeree in understanding that his assent to that bargain is invited and will conclude it. Here, the lender's letter cannot reasonably be interpreted as an offer inviting such an acceptance through demolishing the building.
C is incorrect. A promise can be enforced on a detrimental reliance theory in the absence of a bargained-for exchange.
D is incorrect. A court would not imply such a condition; if the lender intended to condition the loan on the financial soundness of the project, it should have expressly stated so in the letter.