Comment by A. J. Herbert III
This Comment explores the theory of good faith as it applies to one specific type of commercial instrument, the demand note. The nature of demand notes is examined first, with special attention focused upon the tendency of some courts to alter the traditional concept of what constitutes a demand note. The next section examines the concept of good faith and the split in authority on the standard by which good faith should be measured. Third, the jurisprudence involving the necessity of good faith in the call of a demand note is reviewed. Fourth, the economic consequences of successful lender liability claims are reviewed to reveal the potential effects on the financial institutions industry. Finally, a proposal for dealing with these claims by courts that have not yet directly confronted the issue is suggested.
About the Author
A. J. Herbert III.
Citation
64 Tul. L. Rev. 187 (1989)