Barber v. Jacobs
Connecticut Court of Appeals
753 A.2d 430 (2000)
Barber (plaintiff) agreed to buy property from the Jacobs (defendants), paying a $327,000 deposit under a contract with a mortgage contingency clause. Barber applied for and initially got informal approval from one bank, but the bank withdrew approval after Barber's attorney discovered the property violated wetlands regulations — a serious enough problem that the attorney reasonably believed no other lender would approve the loan either. The Jacobs refused to return the deposit, and Barber filed an interpleader action. The trial court found Barber had made reasonable efforts to secure financing even though he applied to only one bank.
Whether a mortgage contingency clause requiring the buyer to make reasonable efforts to secure a suitable mortgage requires the buyer to apply to more than one bank where doing so would be futile.