Definition
A phrase appearing in commercial and financial instruments — including orders, drafts, bills of exchange, checks, and memoranda — that designates the party on whose behalf a transaction is being conducted or against whose account a charge is to be recorded. The phrase identifies the principal behind a transaction, distinguishing the person executing the instrument from the person whose account bears the economic effect.
In practice, "for account of [Name]" signals that an agent, broker, or intermediary is acting on behalf of a named party. The named party is the one to be credited or debited; the person physically executing the order or holding the instrument is acting in a representative capacity.
The phrase carries two closely related but distinct applications:
1. In general commercial instruments: Identifies the party against whose account a payment or charge is to be applied. A check drawn by an agent "for account of" a principal directs the receiving bank or party to look to the principal's account for settlement.
2. In securities and brokerage transactions: Specifies that a broker executing a buy or sell order is doing so on behalf of a named client. The transaction settles to the client's account, not the broker's own book. Related to this is the phrase "for the account," which in older securities usage referred to a deferred settlement method used on stock exchanges, particularly in British practice.
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Common Language
Modern common usage (Wiktionary): No standard entry. The phrase is not in general civilian use.
Historical common usage (Webster's 1913): Not defined as a distinct entry. The constituent words — "account," "for" — carry their ordinary meanings.
The phrase belongs essentially to commercial and legal usage without a meaningful civilian counterpart. Its omission from general dictionaries reflects that it functions as a term of art in drafting and bookkeeping, not in everyday speech. Researchers encountering it in historical instruments should not read it as merely descriptive phrasing — it carries specific legal significance regarding who bears liability and who receives benefit.
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Common Confusion
"For account of" is sometimes read as equivalent to "on behalf of," but the two phrases carry different emphases. "On behalf of" signals agency in a broad sense — authority to act for another. "For account of" is narrower: it specifically directs the financial consequence of the transaction to a named party's account. An agent may act on behalf of a principal in many ways; the phrase "for account of" specifically tells the receiving party where to credit or charge the transaction.
The phrase should also be distinguished from "to the account of," which directs a sum to a named account but does not necessarily signal an agency relationship or identify who bears ultimate liability on the instrument.
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Why It Matters in Research
Researchers working with historical commercial documents — particularly bills of exchange, drafts, warehouse receipts, and brokerage records — will encounter this phrase frequently in 18th- and 19th-century sources. Its significance lies in identifying the true party in interest when an instrument was executed by an intermediary.
In historical corpus research, the phrase is a reliable signal of an agency or consignment relationship. Where it appears, researchers should look for the underlying principal-agent structure: Who authorized the transaction? Who bears the account? This is especially relevant in mercantile law materials, where factors, commission merchants, and brokers routinely executed instruments in their own names "for account of" distant principals.
The brokerage application — "for the account" or "for account of" in stock exchange orders — connects to the history of deferred settlement practices on exchanges, particularly the London Stock Exchange's "account day" system. Researchers in early securities law materials should be alert to this usage, which differs from the general commercial application and carries its own technical meaning within exchange rules and customs.
In trust and estate contexts, the phrase may appear in fiduciary accounting documents where a trustee or executor records transactions conducted for the account of a beneficiary or the estate. Here it helps establish the fiduciary's representational capacity and the beneficial ownership of the asset.
Bouvier's entry is brief and leaves the brokerage application only partially developed — the source text is truncated and does not fully explain the "for the account, selling" method. Researchers relying solely on Bouvier for this term in a securities context will need to supplement with exchange history and broker-dealer materials.
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Historical Dictionary Support
Bouvier's Law Dictionary provides the foundational definition: the phrase designates the person against whom, or the account against which, a thing or sum is to be charged in an order, draft, or memorandum. Bouvier then begins — but does not complete — a second definition addressing its use in brokerage: a method by which a broker executing a client's stock order may either enter a contract for the specific amount ordered or aggregate the order with others.
The truncation of Bouvier's brokerage entry is a gap researchers should note. The "for the account" method in securities trading had a distinct technical meaning tied to settlement cycles and exchange rules that Bouvier's brief treatment does not capture. No significant divergence exists between historical dictionary treatments on the core commercial meaning; the definition has been stable across the period covered by historical legal dictionaries.
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Jurisdictional Note
The phrase is essentially uniform in American and English commercial law usage, rooted in the same mercantile practice. Variations in legal effect — particularly in brokerage contexts — may arise from exchange-specific rules or UCC Article 3 and 4 provisions governing commercial paper, which apply state by state in the United States.
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Encyclopedia Cross-Reference
Fiduciary Accounting — Principles, Standards, and the Uniform Fiduciary Accounting Principles (The Law Mind Trusts, Estates & Probate Encyclopedia)
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