Simple English definitions for legal terms
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Account: An account is a type of agreement that says someone owes you money. This is usually used in business deals. It does not include things like letters of credit, commercial tort claims, deposit accounts, investment property, chattel paper, or rights to payment for money or funds that have been advanced or sold.
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:
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.