I have been sued for a claim under Account Stated, what does that mean?

Earlier this week, we discussed the statute limitations for account stated and other claims creditors and debt buyers use.  Account stated is one of the odder claims and not commonly known or understood.  In 1985, the Supreme Court of Alabama explained it in Univ. of S. Ala. v. Bracy, 466 So. 2d 148 (Ala. Civ. App. 1985):

An account stated is a post-transaction agreement. It is not founded on the original liability, but is a new agreement between parties to an original account that the statement of the account with the balance struck is correct and that the debtor will pay that amount.  Martin v. Stoltenborg, 273 Ala. 456, 142 So. 2d 257 (1962).

The Court went on:

A prima facie case on an account stated is made when the plaintiff proves (1) a statement of the account between the parties is balanced and rendered to the debtor; (2) there is a meeting of the minds as to the correctness of the statement; and (3) the debtor admits liability. Ingalls v. Ingalls Iron Works Co., supra; Barber v. Martin, 240 Ala. 656, 200 So. 787 (1941). The debtor’s admission to the correctness of the statement and to his liability thereon can be express or implied. An account rendered, and not objected to within reasonable time becomes an account stated, and failure to object will be regarded as an admission of correctness of the account. Home Federal Savings & Loan Association v. Williams, 276 Ala. 37, 158 So. 2d 678 (1963); Joseph v. Southwark, 99 Ala. 47, 10 So. 327 (1891).

The Creditor or debt collector must prove each one of these elements.  As in Ayers v. Cavalry SVP I, LLC, 876 So. 2d 474 (Ala. Civ. App. 2003), debt collectors often have trouble even meeting the first one because they are, almost by definition, not a party to the original transaction between the consumer and creditor.

Almost all consumer transactions with creditors should have a written contract.  If the creditor or debt collector can’t produce it, they may try to make a claim under account stated.

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If a creditor or debt buyer has sued you on an account stated claim, please contact us.