LEO: Preparation of Loan Documents LE Op. 1094
Preparation of Loan Documents.
October 26, 1988
You wish to know whether or not it is proper for an attorney for a
borrower to sign a stipulation that loan agreements and loan documentation
prepared by a bank are legal, valid, binding and enforceable.
Disciplinary Rule 5-105(A) states that "A lawyer shall decline proffered
employment if the exercise of his independent, professional judgment on
behalf of a client will be, or is likely to be, adversely affected by the
acceptance of the proffered employment, except to the extent permitted
under DR:5-105(C)." Disciplinary Rule 7-101(B) states: "In his
representation of a client, a lawyer may: (1) With the express or implied
authority of his client exercise his professional judgment to limit or
vary his client's objectives and waive or fail to assert a right or
position of his client." [ DR:7-101]
The Committee opines that this transaction does not compel an attorney to
have undivided loyalties. This is the traditional method of representing a
client in a real estate closing and it is required that the attorney
provide his or her opinion to the client concerning the enforceability and
validity of the loan documents.
Committee Opinion October 26, 1988