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A Better Partnership
August 02, 2013

MSC holds that UCC statute of limitations does not apply to an open account or account stated

In Fisher Sand and Gravel Company v Neal A Sweebe, Inc, the Michigan Supreme Court held that the four-year statute of limitations in Sec 2725 of Michigan's UCC does not apply to actions on an open account or account stated, even if the underlying debt arises out of the sale of goods.  The court reasoned that actions on an account stated or on an open account are "distinct and independent from the underlying transactions giving rise to the antecedent debt."  The court explained that the language of MCL 440.2725 "plainly states that it only applies to actions on the sale of goods, and an action on an account stated is an action on a promise to pay a certain amount that has nothing to do with any underlying sales transactions."  Accordingly, the court concluded that actions on an open account or account stated are instead subject to the six-year statute of limitations in MCL 600.5807(8).

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