Associated Petroleum Products, Inc. v. Northwest Cascade, Inc., — P.3d —-, 2009 WL 824433 (Wash.App. Div. 2 Mar 31, 2009) (NO. 36834-0-II)
“Account Stated” is one of the common counts of English common law. It arose in the same time period when courts thought caveat emptor made good sense. It was okay to trick someone into overpaying or buying bad merchandise because it was the obligation of the buyer to inspect before paying. Similarly, Accounted Stated assumed that a failure to carefully inspect the invoice of the seller made the buyer responsible for all charges. This may have made sense in days of snail mail but is hardly reasonable when invoices are delivered by email.
The trial court applied the common law. Division Two struggled to bring Account Stated into the 21st century. It held that a party to an ongoing terminable at will contract must give reasonable notice of any contract change to the other party. Reasonable notice is notice “‘fairly to be expected or required under the particular circumstances.’” Change in a billing do not as a matter of law give reasonable notice.
An account stated is “‘a manifestation of assent by debtor and creditor to a stated sum as an accurate computation of an amount due the creditor.’”“ Sunnyside Valley Irrigation Dist. v. Roza Irrigation Dist., 124 Wn.2d 312, 315, 877 P.2d 1283 (1994) (quoting 2 Restatement (Second) of Contracts § 282(1), at 386 (1981)). There must be some form of assent to the account, although that assent may be implied from the circumstances and acts of the parties. An account stated is an admission of the facts asserted and a promise by the debtor to pay the sums indicated. But “[a]n account stated does not of itself operate to discharge any duty.” Sunnyside Valley Irrigation, 124 Wn.2d at 315 (citing 2 Restatement (Second) of Contracts § 282(2), at 386). The effect of an account stated as a promise is subject to the rules on mistake.
A unilateral failure to know or discover facts does not bar the mistaken party from avoiding or reforming the contract unless his fault amounts to a failure to act in good faith or in accordance with reasonable standards of fair dealing. A party has engaged in fraud or inequitable conduct if it conceals a material fact that it has a duty to disclose to the other party.