Failure to object to an invoice or statement in a timely manner could leave you or your company on the hook for that amount, even if it is not technically owed. 

A Brief Primer Might Be Helpful & Timely

Under New York’s legal doctrine of “account stated”, the court can find an implied “agreement” between parties, based upon their prior transactions, with respect to the correctness of the balance due on an invoice sent to the other party.  See Michael B. Shulman & Associates, P.C. v. Canzona, 201 A.D.3d 716, 717 (2^nd Dept. 2022).

To establish an “accounts stated” claim, the plaintiff must show that (1) the plaintiff provided the defendant with the statements or invoices, and (2) the defendant “accepted” them by failing to object within a reasonable time.  See Vebeliunas v. Overstrom, No. 160255/2016, 2017 WL 4517082, *2 (N.Y. Sup. 2017) (citing Rockefeller Group, Inc. v. Edwards, 164 A.D.2d 830 (1^st Dept. 1990)).  The plaintiff can establish defendant “accepted” the statement by making a partial payment, or even by failing to object or protest the statement upon receipt within a reasonable time and instead staying silent.  See, e.g., Schwerzmann & Wise, P.C. v. Town of Hounsfield, 126 A.D.3d 1483, 1484-85 (4th Dept. 2015) (claim established where plaintiff tendered proof of monthly bills over a two-year period to which defendant did not object).  While the issue of whether the defendant impliedly agreed to the account is a fact determination, applied on a case-by-case basis, courts have found a period of silence, lasting four to five months or more, to be an “unreasonable amount of time” that can give rise to implied acceptance.  See, e.g., R.A. Associates v. Lerner, 245 A.D.2d 437, 438 (2^nd Dept. 1997) (four months); Shea & Gould v. Burr, 194 A.D.2d 369, 371 (1^st Dept. 1993) (five months).

Critically, there are several important exceptions that soften the harshness of the “account stated” doctrine.

1. First, there can be no account stated if the plaintiff admits its own statement is erroneous.  See, e.g., Owen Mumford Ltd. v. Ulster Scientific, Inc., 235 A.D.2d 804, 805 (3d Dept. 1997) (plaintiff admitted statement included erroneous 2.5% surcharge).
2. Second, there can be no account stated if there are multiple, conflicting statements.  See, e.g., Sisters of Charity Hosp. of Buffalo v. Riley, 231 A.D.2d 272, 283-84 (4th Dept. 1997) (plaintiff submitted two conflicting statements).
3. Third, there can be no account stated if a defendant makes a timely objection to the statement once received, or even timely questions the statement.  See, e.g., SageGroupAssociates, Inc. v. Dominion Textile (USA), Inc., 244 A.D.2d 281 (1^st Dept. 1997); Matthew Adam Properties, Inc. v. The United House of Prayer for All People of the Church on the Rock of the Apostolic Faith, 126 A.D.3d 599 (1st Dept. 2015).
4. Fourth, there can be no account stated if the parties were in dispute over the amount of the debt when the invoice was sent (which must be substantive and more than a defendant’s conclusory denial of the debt).  See, e.g., Abbott, Duncan & Wiener v. Ragusa, 214 A.D.2d 412, 413 (1^st Dept. 1995) (defendants were disputing the quality of the work invoiced); see also Hubbell, Inc. v. Lazy Swan Golf & Country Club LLC, 187 A.D.3d 1448, 1450 (3^rd Dept. 2020) (no account stated based on failure to object to billing statement where defendant had already objected to the plaintiff about the plaintiff’s performance of the services rendered).
5. Fifth, there can be no account stated where a defendant can show the statement was the product of a plaintiff’s fraud, a mistake in the statement that the defendant would have not been in a position to uncover, or similar “equitable” considerations.  See Shaw v. Silver, 95 A.D.3d 416, 416-17 (1^st Dept. 2012); York Hunter Services, Inc. v. Brooklyn Historical Society, 14 Misc.3d 1216(A), *3 (N.Y. Sup. 2007) (dismissing accounts stated based on mistake where plaintiff had exclusive knowledge of the facts concerning the mistake).
6. Finally, there can be no account-stated claim if there was no underlying debt or obligation between the parties to begin with, from which the statement arises.  See Cushman & Wakefiled, v. Kadmon, 175 A.D.3d 1141 (1^st Dept. 2019) (dismissing accounts stated claim based on disputed entitlement to the underlying brokerage commission:  “an account stated cannot be used to create liability where none otherwise exists,” and no account stated claim can lie where “the parties might not have reached a meeting of the minds” with respect to the underlying obligations).