What the court clarified
The court examined whether ignoring a concrete full-payment offer from a third party before mortgage enforcement breached duties of good faith and cooperation.
What duty does a mortgage creditor owe when another bank offers credible full repayment before foreclosure?
Preserve the full offer, evidence of financing, delivery timestamps, foreclosure chronology and proof of resulting loss. A vague non-binding suggestion from an unidentified third party may be materially distinguishable from the credible complete-payment offer considered by the court.
Continue reading belowMaterial facts
A debtor challenged the creditor’s conduct when collateral was exposed to auction notwithstanding another established bank’s written proposal to settle the outstanding obligation in full. The reality and credibility of the proposed payment were central.
Court reasoning and holding
A contractual right to realise security is not an unlimited liberty to ignore a credible alternative. A real offer of full performance by a reputable third party changes the good-faith assessment where the creditor’s legitimate economic interest can be met through a less damaging route. The court referred to Civil Code article 316(2), concerning care for the other party’s legitimate interests.
Practical application: what to examine
Preserve the full offer, evidence of financing, delivery timestamps, foreclosure chronology and proof of resulting loss. A vague non-binding suggestion from an unidentified third party may be materially distinguishable from the credible complete-payment offer considered by the court.
Limits of the precedent
Good faith does not erase the debt or the security right; the concrete offer and subsequent conduct must be examined.
Provisions considered by the court
Civil Code article 316(2) and good faith
Historic provisions cited by the court may differ from present law. Consult the official legislative gazette for the current text. matsne.gov.ge
Read the primary decision
The note is grounded in a published Supreme Court explanation and decision. Review the full document when checking its reasoning, procedural outcome and factual context.