Model Closing Opinion Letter (Annotated) - American Bar Association

2 Model Closing Opinion Letter (Annotated)
Givers would permit future lenders, as defined in the loan agreement,
to rely upon the opinion with the caveat that the opinion
spoke only as of its date with no obligation to address changes in
law or changes in facts after the date on which the opinion was delivered,
which was generally the original closing or funding date
for the transaction, and that any future persons who were permitted
to rely on the opinion were permitted to rely on the opinion “to
the same extent as—but to no greater extent than—the addressee.”
ABA Guidelines § 1.7.
Over time, as loan and real estate transaction documents came to
be included in securitization and other structured transactions, requests
were made to permit the rating agencies and all future assignees
to rely upon the opinion. As Opinion Givers are having less
success in limiting the universe of reliance parties to the original
lenders, as defined in the transaction documents, and the definition
of lenders has expanded beyond the normal banking lenders to
include insurance companies, mutual funds, and hedge funds,
Opinion Givers have become increasingly concerned over how
widely their opinions may be circulated and how many potential
recipients might one day surface in the event there is litigation with
respect to the opinion.
(I)(4) [Subject to the foregoing, this] [This] Opinion Letter
may be relied upon only by you in connection with the execution
and delivery of the Loan Documents and the transactions contemplated
thereby. You may not rely upon this Opinion Letter for
any other purpose, and no other person or entity may rely upon
this Opinion Letter for any purpose without our prior written consent.
This Opinion Letter may not be referred to, or described,
furnished or quoted to, any other person, firm or entity, without in
each instance our prior written consent.
Note: Some cases hold that notwithstanding a prohibition
against reliance by any party other than the Opinion Recipient,
other persons who reasonably could have been expected to rely may
have standing, and interested parties to whom copies of the Opinion
Letter have been shown or delivered by the Opinion Recipient
may be entitled to rely on it. Hence, paragraph (I)(4) goes further
than simply prohibiting reliance.
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Yours truly,