Michigan Supreme Court Rules that an Action on an Account Stated or Open Account is Subject to Six-Year Statute of Limitations

In a recent decision, the Michigan Supreme Court held that Michigan’s Uniform Commercial Code, MCL § 440.2725, is inapplicable to actions on either an open account or an account stated because these actions are separate and distinct from the underlying transactions giving rise to the antecedent debt.[1] The Court held that actions on an open account and an account stated are subject to the 6-year statute of limitations provided by MCL § 600.5807(8).

The Court went into an in-depth analysis of the differences between account stated and open account claims. Ultimately, the Court concluded that account stated and open account claims are not breach of contract actions in relation to the sale of goods or services; but rather, they are actions to collect on a debt that result from the parties’ credit relationship regardless of the underlying transactions.

Therefore, the 6-year statute of limitations provided by MCL § 600.5807(8) applies to account stated and open account claims.

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[1] Fisher Sand & Gravel Co v Neal A Sweebe, Inc, decision of the MI Supreme Court, decided July 30, 2013 (Docket No. 143374 ).