What is a Claim for “Account Stated” in a Debt Collection Lawsuit?
What does it mean if there is a claim against you for “account stated” in a debt-collection lawsuit in Massachusetts? How do you defend against it? This post answers these questions.
Most lawsuits lawsuit, including lawsuits for collection of debts, state the legal basis for the case. A claim for something like “breach of contract” often comes to mind.
In Massachusetts, though, debt-collection lawsuits often include a claim for something called “account stated.” A claim for account stated is not as well known and requires that the collector prove different elements than for a breach of contract.
An account stated is “the manifestation of assent by the debtor and creditor to a stated sum as an accurate computation of an amount due to the creditor.” Restatement (Second) Contracts § 282.
This means that if the debt collector sends a statement they can request the court to deem the consumer to have agreed to the amount – if the consumer didn’t object. In short, the sending of an account statement creates a new, implied contract to pay.
Another case explains that an account stated “is an acknowledgment of the existing condition of liability between the parties. From it the law implies a promise to pay whatever balance is thus acknowledged to be due.” Chace v. Trafford, 116 Mass. 529, 532 (1875).
One defense to an account statement claim is that the amount demanded in the lawsuit is different than the amount in the account. Debt collectors often add interest and fees when they file their lawsuits, meaning that the claim for account stated should fail. The case of Baker Auto Co. v. Bennett overturned an account stated claim because the amount of the invoice “was for an amount different from that pleaded [demanded in the lawsuit].”
Another defense in a debt collection case is for the consumer to show that they did not impliedly agreed to pay the debt collector when sent the account. There must be more. As one case explains, “the mere mailing of a bill and the recipient’s silence do not reflect an agreement to pay.” Braude & Marguiles, P.C. v. Fireman’s Fund Ins. Co., 468 F.Supp.2d 190 (D.D.C., 2007).
As you can see, a debt collection lawsuit in Massachusetts may include a claim for account stated. A competent attorney should review whether the debt collector’s allegations are sufficient, or whether the case should be disputed.
Culik Law is a Massachusetts consumer protection law firm. Our attorneys have handled hundreds of debt collection lawsuits, including claims for breach of contract and account stated. If you are dealing with a debt in collection in Massachusetts, contact us to see how we can help.