Legal Definitions - account

An account is a type of financial asset that gives the holder the right to receive payment for a debt owed to them. This is defined under Article 9 of the Uniform Commercial Code. Examples of accounts include:

• A customer's unpaid balance on a credit card
• A business's outstanding invoices for goods or services provided
• A landlord's right to collect rent from a tenant

However, it's important to note that certain types of financial assets are not considered accounts under the law. These include letters of credit, commercial tort claims, deposit accounts, investment property, chattel paper, and rights to payment for money or funds that have been advanced or sold.

For example, if a business sells goods to another business on credit, the outstanding balance owed to the seller is considered an account. The seller has the right to receive payment for the debt owed to them by the buyer. However, if the seller has a claim against the buyer for damages caused by the buyer's negligence, this would not be considered an account under the law.