Definition
A running account is an open, unsettled account between parties that remains active and unresolved — one in which transactions continue to be added and no final balance has been struck or agreed upon. It is characterized by ongoing, mutual dealings: credits and debits accumulate over time, neither party has rendered or accepted a final accounting, and the balance remains fluid.
A running account is distinguished from a stated account, in which the parties have examined the transactions, agreed upon a final balance, and rendered that balance settled and binding. It is also distinguished from a liquidated account, in which the amount owed is fixed and certain. Where an account is still running, neither the total nor the liability of either party is considered conclusive.
The term is most commonly encountered in commercial and contract disputes involving ongoing credit arrangements, supplier relationships, or recurring service agreements where invoices accumulate over a period without periodic settlement.
Common Language
Modern common usage (Wiktionary): No standard entry. "Running" in ordinary English suggests something in motion, ongoing, or continuous — as in a running total or running tab.
Historical common usage (Webster's 1913): "Running" as an adjective means "kept for a run or race" or "consecutive; as, running time." A "running account" in lay usage would suggest a tally being kept as transactions occur.
The gap between common and legal meaning here is modest but worth noting. In ordinary speech, a "running tab" or "running total" simply means an accumulating count. In law, the term carries a specific technical distinction: a running account is not merely a tally still in progress — it signals that the account has not been stated or liquidated, which has direct consequences for the statute of limitations, the right to demand an accounting, and the ability to treat a claimed balance as an admission.
Common Confusion
Running Account vs. Stated Account: These terms are direct opposites and frequently appear together in litigation. A running account is open and unsettled; a stated account is one the parties have examined and agreed upon, making the balance presumptively correct and difficult to reopen. Researchers should not assume that an account described as "running" in older sources means it was simply ongoing in time — it means specifically that no agreement on balance has been reached.
Running Account vs. Open Account: These terms are used interchangeably in some sources, including Bouvier's, which defines a running account simply as "an open account." While largely synonymous, "running account" more specifically emphasizes the mutual, reciprocal nature of the dealings — both parties may have claims against the other — whereas "open account" sometimes describes a one-sided credit arrangement. Context determines which sense applies.
Why It Matters in Research
The primary research trap with running accounts is the statute of limitations. Courts have long debated when the limitations period begins to run on a running account: from the date of the last transaction, from the date of each individual charge, or from some other triggering event. Different jurisdictions resolved this differently, and historical sources reflect that uncertainty. A researcher reading an older opinion must be alert to which rule the court applied and whether that rule has since been superseded.
The mutual-demands element is also significant. Historical cases, including the Indiana decision quoted consistently across Black's and Burrill's, emphasize that a running account involves reciprocal demands — not simply a creditor-debtor relationship running in one direction. This distinction affected whether a party could set off claims and whether the account could be treated as a single transaction for pleading purposes.
In practice, the term surfaces in disputes over when an account became stated (and thus settled), whether a payment constitutes an acknowledgment restarting the limitations clock, and whether the parties' course of dealing established an account at all. Researchers working in commercial law, contract disputes, or creditor-debtor history should treat "running account" as a term with litigation consequences, not merely a bookkeeping descriptor.
The connection to merchants' accounts — flagged by Bouvier's cross-reference — is worth following. Merchants' accounts historically received special treatment under limitations statutes, and some jurisdictions applied separate limitation periods specifically to running accounts between traders.
Historical Dictionary Support
The four source dictionaries are in close agreement, which is unusual and instructive. Black's (both editions), Burrill's, and Bouvier's all define the term consistently as an open, unsettled account distinguished from a stated and liquidated account. The verbal formula — "mutual accounts and reciprocal demands between the parties, which accounts and demands remain open and unsettled" — appears across Black's 1st, Black's 2nd, and Burrill's, all attributing it to the same Indiana case, indicating this judicial language became the working definition in the legal lexicon.
Bouvier's is the most concise, offering only "an open account" and directing readers to fuller treatments under Account, Merchants' Accounts, and Limitations — suggesting the term's practical importance lay in those cross-cutting doctrines rather than in the definition itself. The Limitations cross-reference (truncated in the source) points toward the statute of limitations complications noted above.
What the historical dictionaries collectively omit: they do not address how running accounts interact with implied contracts, account stated by conduct, or the consequences of partial payment. These were live issues in 19th-century commercial litigation that researchers will find in the cases rather than the dictionaries.
Jurisdictional Note
Treatment of running accounts for statute of limitations purposes varies by jurisdiction and has changed over time. Some courts start the clock from the last item charged; others from the date the account was closed or demanded. Researchers should verify the applicable rule in the relevant jurisdiction and period rather than assuming a uniform approach.
Encyclopedia Cross-Reference
The Law Mind Property Law Encyclopedia: Real Covenants — Running with the Land (Horizontal and Vertical Privity) — Note: despite the shared word "running," this entry is unrelated to running accounts. Do not follow this cross-reference for commercial account research.
No Law Mind Encyclopedia entry directly addresses running accounts or open accounts in a commercial context.