Opinion ID: 1312524
Heading Depth: 1
Heading Rank: 1

Heading: Conejo Valley Development Company and associated parties were entrepreneurs.

Text: The role of the supplier of capital is entirely different. The lender, as a supplier of capital, is to receive by contract a fixed return or price for his investment. He owns no right to participate in the profits of the enterprise no matter how great they may be. On the other hand, he is insulated from the risk of loss of capital and interest in return for making his money available, other than the risk of nonpayment of the contract obligations. Indeed, it is elementary that the owner of money lends it to an entrepreneur and receives only a fixed return, rather than obtaining the gain from using the money himself as an entrepreneur, on the condition that he be relieved of risk. The basic, underlying risk in mortgage lending is that the lender might not get back what is owed to him in principal and interest. It seems abundantly clear, both legally and logically, that if the lender has no opportunity to share in the profits or gains beyond the fixed return for his supplying of capital, i.e., if he has no chance of reaping the entrepreneur's reward and exercises no control over the entrepreneur's business, elementary fairness requires that he should not be subjected to the entrepreneur's risks.