What is an Open Account?
Many diverse industries can avail themselves of the Louisiana Open Accounts Statute in order to collect sums due to businesses. For the purposes of this statute, “open account” includes any account for which a part or all of the balance is past due, whether or not the account reflects one or more transactions and whether or not at the time of contracting the parties expected future transactions. “Open account” includes debts incurred for professional services, including but not limited to legal and medical services. Recently, some Louisiana courts have expanded the availability of the Louisiana Open Accounts Statute to the construction industry, broadening its use to other companies who could benefit and recover sums due.
Louisiana’s Open Account Statute
Louisiana has a law which allows for a company to recover sums due, generally referred to as the Louisiana Open Accounts Statute. This statue not only provides a vehicle to recover the underlying sum due, but it also provides the opportunity to possibly recover attorney’s fees incurred as a result of being forced to bring suit.
Your Business is Owed Money: Now What?
You’ve provided goods or services to a contractor or a customer and they haven’t paid. You can’t understand why they won’t pay. Sternberg, Naccari & White, LLC can help you with enforcing your rights.
Collecting an amount due for a good or service is the very foundation of a business transaction. But what happens when a customer or party to a contract fails to pay for the products or services they have received?
Send a Letter First
The Louisiana Open Accounts Statute, La. R.S. 9:2781, allows for an award of attorney’s fees where “any person fails to pay an open account within thirty days after the claimant sends written demand therefor correctly setting forth the amount owed.” It is therefore essential to draft an appropriate demand letter and also serve that demand letter on the appropriate person at the appropriate address to satisfy the statute’s requirement of fair notice that the debt is outstanding.
Service may be satisfied through first class mail at the “last known address of the debtor;” however, facts and circumstance by make this seemingly simple provision quite complex. In the case of debtors with multiple addresses, divisions, and subsidiaries across many geographic regions, individual facts may dictate that multiple demands be sent. Additionally, although the use of simple first class mail is mandated, the evidentiary benefits of certified mail may be helpful if the service of the demand letter is challenged as the suit on the open account advances in the courtroom.
The letter should include accurate balance information, requisite specification of detail in invoices, and supporting documentation that you should assume will be strictly scrutinized for sufficiency by a court. For example, courts have ruled that computer generated invoices have been insufficient to support an action when the computer invoice may have a very small margin of error. Other courts have ruled that even though a detailed invoice and balance sheet was included in the demand letter, the effort was insufficient to proceed the Louisiana Open Accounts Statute because the invoice lacked a key to describe billing codes and terminology in detail. It is vital that an experienced attorney review any such document before it is sent to a debtor.
Call Sternberg, Naccari & White Today
The Louisiana Open Accounts Statue has many more nuances and pitfalls and businesses may find it difficult to recover funds from clients who owe money; however, the road doesn’t need to be traveled alone. Contact Sternberg, Naccari & White, LLC is a firm focused on your bottom line: call us for a consultation from an experienced business attorney.