Open Accounts for Inventory Sales Based on Credit Transactions

Open Accounts for Inventory Sales Based on Credit Transactions

What is an action on an open account for inventory sales based on credit transactions?

The seller creates an open account when they agree to sell goods or services recurrently on credit, and the other party, the customer, assumes the obligation to make payments. An open account is kept open in anticipation of future credit transactions. Typically, the parties intend that the individual transactions on the open account be considered a series rather than independent transactions. Thus, an action to recover on an open account seeks to on a debt created by a series of credit transactions.

If there is a written contract between the parties, the seller is likely better off bringing a breach of contract claim. However, where there is no written contract, and the customer has failed to make sufficient payments on the open account, Florida law allows the seller to bring an action to recover that open account.

Need help collecting on an open account? Schedule your consultation today with an accounts receivable and judgment collections attorney.

What are relevant laws related to an action on an open account in Florida?

Both statutory and case law govern actions on open accounts. Statutorily, section 95.11(3)(k) of Florida Statutes specifies that the statute of limitations for actions on an open account runs for four years.

Case law has been critical in establishing what must be proven by the plaintiff, what defenses are available to the defendant, and what remedies are available for an open account action. For example, in Hawkins v. Barnes, the court fleshed out when the statute of limitations begins to run for an action on an open account. 661 So. 2d 1271, 1273 (Fla. 5th DCA 1995). Typically, the statute of limitations runs separately for each item charged to the open account. However, if the parties agree that each item of an account represents a single demand for payment of the entire balance, the statute runs from the date of the last item for all unpaid charges.

What is required to prove a case for an action on an open account in Florida?

• Contract formation: Because courts evaluate open account actions under contract law, the plaintiff must prove that the parties expressly or implicitly made a valid contract by showing the existence of an offer, acceptance, and consideration.
• Correctness of the charges: The plaintiff must provide proof of the open account and the charges by attaching an itemized invoice, or some other acceptable form of evidence, to the Complaint.
• Reasonableness of the charges: The plaintiff must prove that the amounts charged for the goods or services are reasonable.

When a set of facts is appropriate to meet the requirements for an action on an open account, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path forward to seek appropriate remedies, such as expectation damages.

To see what actions may be available for your unique situation, please contact our office to set up your initial consultation.

What are common defenses to an action on an open account in Florida?

The primary defenses to an action on an open account in Florida include the following:

• Contract formation: The defendant may argue that the plaintiff cannot prove one or more of the three core elements of an enforceable contract.
• Statute of limitations: The defendant may argue that the plaintiff’s claim is barred by the statute of limitations, typically four years.

When defending against an open account action in Florida, one core strategy is to focus on disproving the element of reasonableness by providing evidence that the charges are overly inflated in light of the quality of the services or goods.

To see what defenses may be available for your unique situation, please contact our office to set up your initial consultation.

Have more questions about an open account-related situation?

Crucially, this overview of actions on open accounts does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain a tireless advocate every step of the way. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to set up a consultation.