ACCOUNT STATED Meaning and
Definition
-
"Account Stated" is a legal term referring to a specific type of agreement or contract primarily used in the field of commercial or business transactions. It is an agreement between two parties, typically a seller and a buyer, regarding the outstanding balance or debt owed by the buyer to the seller. In such an agreement, both parties acknowledge and confirm the existence of an account between them that details the history of transactions and the corresponding balances or debts.
This form of agreement typically arises when the parties involved have had a series of previous transactions that have not been fully settled. Rather than individually documenting and proving each transaction, an account stated simplifies the process by consolidating and summarizing the various transactions into one comprehensive statement.
The account stated is considered an implied contract, meaning that it can be created even without a formal written agreement. It is established based on the parties' conduct and actions, such as the regular exchange of invoices, statements, or payments. Once the account stated is accepted and agreed upon by both parties, it becomes legally binding, making it easier to pursue legal actions or collections for the outstanding debt.
Overall, "account stated" serves as a simplified means to verify and settle debts, providing a clear and concise overview of the financial relationship between the involved parties.
Etymology of ACCOUNT STATED
The term "ACCOUNT STATED" is a legal phrase that originated from English common law.
The word "account" comes from the Old French word "acounte", which means "reckoning" or "counting". It ultimately traces back to the Latin word "computare", meaning "to reckon" or "to calculate".
The word "stated" is a past participle of the verb "state", which comes from the Latin word "status" meaning "state" or "condition". In legal context, "stated" refers to a statement of account that has been agreed upon and confirmed by both parties involved.
Therefore, "ACCOUNT STATED" refers to an agreed-upon or settled account, typically used in legal matters when there is a mutual acknowledgment by both parties regarding the amount owed or the balance of debts between them.
