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In Bokhari v. North Eastern Savings Bank, the Massachusetts Superior Court allowed a Chapter 93A claim to proceed to trial against a lender based on alleged misrepresentations contained in a mortgage pre-approval letter issued to prospective homebuyers. The plaintiffs — the sellers — claimed the pre-approval letter the defendant issued to the buyers did not actually verify the buyers' credit, assets, or income. The plaintiffs allegedly relied on the pre-approval letter to enter into a purchase and sale agreement with the buyers, only to suffer losses when the buyers later walked away from the transaction. The defendant moved for summary judgment arguing, among other things, that the Chapter 93A claim should fail because the plaintiffs lacked a direct commercial relationship with the defendant.
The court rejected that argument, emphasizing that Chapter 93A liability does not always require a direct commercial relationship between the parties. Instead, the court noted that the relevant inquiry is whether the alleged conduct interfered with and occurred "in the conduct of any trade or commerce." Accordingly, knowingly or recklessly conveying false information in a business context in order to help a client bring about a commercial transaction with a third party constitutes conduct "in trade or commerce" and may violate Chapter 93A. The court concluded that the summary judgment record could support a trial finding that the defendant acted in a business context and interfered with trade or commerce by intentionally or negligently misrepresenting the basis for its pre-approval letter, which foreseeably induced the plaintiffs to enter into the purchase and sale agreement. Therefore, the absence of a direct commercial relationship did not preclude the Chapter 93A claim.
Bokhari reinforces the concept that Chapter 93A liability may attach, even absent a direct business relationship, where misrepresentations made in a commercial context foreseeably influence a third party's participation in a commercial transaction.
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