MBE Rules · Contracts
Account Stated
Account stated
The rule
Parties with prior transactions who agree — expressly or by retention without objection — on a balance due create a new enforceable obligation on the stated sum.
In plain English
An account stated is a legal agreement between parties who have had prior transactions. When they agree on a specific balance owed, either through explicit agreement or by not objecting to the balance presented, they create a new enforceable obligation for that amount.
Worked example
Alice and Bob have conducted several transactions over the years. After reviewing their accounts, Bob sends Alice a statement showing a balance of $1,000, and Alice does not respond or object to this amount. By not objecting, Alice has agreed to the balance, creating a new enforceable obligation for her to pay Bob $1,000.
Memory hook
Silence can be golden: agreeing to a balance by not objecting creates a new obligation.
The trap
Exams may present scenarios where a party remains silent after receiving a statement, leading students to overlook the implications of that silence as an agreement.
How examiners test it
Questions often involve a series of transactions followed by a statement of account, testing whether the parties' actions or inactions constitute an agreement on the balance due.
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