PHAM & CLOVES, PLLC

Collection of Outstanding Business Debts

“Suit On Sworn Account”

There are many types of business debts.  In the interest of time, I am devoting this blog to speak only in regards to the collection of sworn account.  So, what is a sworn account?  A sworn account is the unpaid, overdue balance of goods or services rendered based on an existing contract or based on the parties’ customary practice in providing such goods and services.  A contract can be written or oral.  However, a law suit on the oral contract is limited to $5,000 under the statute of fraud.  Nevertheless, an oral contract, with affirmation at a later time, such as a confirmation email or a signed purchase order, does not fall under the statute of fraud.  Please contact the Houston Business Collection Lawyers and the Houston Contract Litigation Attorneys at Veritas Legal Group, P.C. at 713-492-0337 to determine if you have a binding and enforceable contract.

A law suit to collect a sworn account is called “suit on sworn account.” In theory, a suit on sworn account is no more than a breach of contract cause of action.  It is a special type of contract breach suit.  In filing the suit, the plaintiff has the burden of proof and must show prima facie of an existing contract, written or oral, or based on the usual and customary manner and price in which the parties have conducted business in the past in lieu of an actual contract. The elements for a suit on sworn account are as follows:

• The plaintiff sold goods or furnished services to the defendant. The prices were in accordance to the terms of the contract or they were in the customary prices if no contract existed;
• There is a systematic record of the transactions;
• All lawful offsets, credits or payments have been applied to the account;
• The account remains unpaid and the balance is outstanding;
• The damages are reduced to a figure (liquidated); and
• The plaintiff must verify the petition under oath.

A suit on sworn account deals only with accounts related to goods and services purchased and delivered.  It does not apply to the collection of unpaid balances on credit cards, bank notes or back rent in a lease.  These issues are not considered as goods or services in the context of a suit on sworn account. For collection on other type of collections and breach of contracts, please contact the Houston Contract Litigation Lawyers and the Southwest Houston Commercial Litigation Attorneys at Veritas Legal Group, P.C.  Our experienced Texas Business Litigation Lawyers and our Houston Business Collection Attorneys will provide a detail consultation.  Based on the fact of your case, our business litigation attorneys will advise you as to your rights, obligations, level of recovery from the breach, and your potential liability and defenses.   Please contact our Houston Collect on Sworn Account Law Firm at 713-492-0337 or contact us through our online contact form.