A general partner sued his lender (Alamo Savings) for refusing to fund a construction loan. The jury found the lender breached the contract and awarded $993,000 in damages. However, the court threw out the verdict, ruling that the lender had a clear contractual right to withhold 10% retainage and that the damages claim lacked sufficient proof of actual losses. The lender won its counterclaim for the unpaid loan balance.
Retainage clauses in loan agreements are enforceable—lenders can legally withhold funds if the contract explicitly allows it. Review your loan documents carefully before work begins.
Claiming lost profits as damages requires solid proof of what you actually would have earned. Vague or speculative damage estimates will be rejected by courts.