Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 3

Yates, a vice president of the Washington Irving Bank, met with Morrow. They reached an agreement whereby the bank promised to loan Morrow money at 7.5 percent interest per year for ten years if Morrow would bring all his personal and corporate banking business to Washington Irving Bank. The bank made loans to Morrow at this rate for five years until Yates resigned from the bank. Morrow was then notified by the bank that because of economic conditions, it would need to charge a higher rate of interest on any new loans that were made. Morrow sued the bank for breach of contract, claiming that the bank had to continue the 7.5 percent rate of interest because of the agreement. Should Morrow win this case?