Open Book Account in California: Suing on a Running Account Without a Signed Contract

Last updated: November 2026. Reviewed by Pavel Kolmogorov, California business litigation attorney (State Bar No. 321018).

An open book account is a California claim for the unpaid balance on a running account that a creditor records in the regular course of business. If a customer has owed your company on a running account for two years and nothing was ever signed, you can usually still sue. The limitations period is four years under Code of Civil Procedure section 337, generally measured from the last entry. Kolmogorov Law, P.C. brings and defends these claims for businesses in Orange County, Los Angeles, and across California.

Call (909) 235-6116 or contact us online to discuss an unpaid account, or a common counts complaint your business was served with.

What an open book account is

The Code of Civil Procedure supplies the definition. A book account is a detailed statement that serves as the principal record of one or more transactions between a debtor and a creditor, arising out of a contract or a fiduciary relation. It shows the debits and credits, and against whom and in whose favor the entries are made. It must be entered in the regular course of business and kept in a reasonably permanent form. (Code Civ. Proc., § 337a, subd. (a).) The statute lists bound books and cards, then adds any other reasonably permanent form, which is where a modern accounting ledger fits.

The account is "open" when a balance remains due. (Eloquence Corp. v. Home Consignment Center (2020) 49 Cal.App.5th 655, 664-665.)

One limit is recent. A book account no longer includes consumer debt, defined as certain personal, family, or household obligations incurred on or after July 1, 2024. (Code Civ. Proc., § 337a, subds. (a), (b).) By its terms, that carve-out does not reach an account between two businesses.

How a book account differs from breach of contract

A breach of contract claim asks the court to enforce particular promises. A book account claim asks for the balance of an account. The creditor does not have to prove every order, delivery, and price term one at a time, because the ledger carries much of that weight. California's jury instruction for the claim is CACI No. 372.

There is a catch. As a general rule, money owed under an express contract that fixes the parties' duties is not an open book account, whether that contract is written or oral. The exception applies when the parties, by agreement or by conduct, treated the amounts due as items in an account between them. (Eloquence, supra, 49 Cal.App.5th at pp. 665-666.) Keeping a spreadsheet of invoices issued under a contract does not, by itself, turn the contract into a book account.

That is why most complaints plead both theories in the alternative. The book account is one of the common counts, along with account stated and money had and received.

The four-year clock and when it starts

An oral contract generally must be sued on within two years. (Code Civ. Proc., § 339, subd. 1.) A book account gets four. (Code Civ. Proc., § 337, subd. (b).) For a business that billed for services over years of phone calls and emails, the difference often decides whether there is a case at all. Sales of goods differ: the Commercial Code allows four years, written contract or not. (Com. Code, § 2725, subd. (1).)

Courts have said the period begins with the last entry in the account. Not every later payment counts as an entry. In one Court of Appeal decision, the creditor had stopped extending credit and demanded the full balance. A later partial payment did not reopen the settled account. (R.N.C., Inc. v. Tsegeletos (1991) 231 Cal.App.3d 967, 971-973.)

Where each side extends credit to the other, a mutual, open, and current account with reciprocal demands accrues from the last item proved on either side. (Code Civ. Proc., § 344.) Our page on the statute of limitations for breach of contract compares these periods.

What records prove the account

Judges look at how the record was made. In Eloquence, the creditor offered a receivables statement dated one day before the complaint was filed, plus spreadsheets that appeared to be prepared for the lawsuit. The court held that none of them showed an account kept in the regular course of business. (Eloquence, supra, 49 Cal.App.5th at pp. 666-667.)

The useful evidence is ordinary. An accounts receivable ledger with entries dated as the transactions happened. Monthly statements that went to the customer. Payments the customer made "on account" instead of against a single invoice. Emails in which the customer discusses the balance. I would rather have a plain ledger export with its original entry dates than a polished summary created last week.

Attorney fees on a book account

Most unpaid-invoice cases have no fee clause, so each side pays its own lawyer. A book account is a partial exception. The prevailing party is entitled to reasonable attorney fees, capped by statute. The caps rose on January 1, 2026. For a business account, a winning creditor may now recover the lesser of $1,600 or 25 percent of the principal owed. A defendant found to owe nothing may recover up to $1,600. (Civ. Code, § 1717.5, subd. (a).)

Two conditions matter. If the parties have a signed written agreement, these fees are available only when that agreement says the prevailing party is entitled to them. The statute also does not apply when a bank or a licensed finance lender is a party. (Civ. Code, § 1717.5, subds. (a), (c).) Where the contract has its own fee provision, the analysis shifts to Civil Code section 1717.

If your company is owed the money

Send a statement of the full balance and keep the ledger exactly as it is. Do not rebuild it. Count the deadline from the oldest plausible date, not the most favorable one, and treat the two-year mark as the working deadline when nothing was signed. The four-year period is an argument, and arguments can lose.

Our guide to collecting unpaid invoices covers the steps before and after filing.

If you were served with a common counts complaint

The summons directs a written response within 30 days after service. (Code Civ. Proc., § 412.20, subd. (a)(3).)

A defendant has a specific tool here. A plaintiff need not plead the items of an account, but must deliver a copy within ten days after a written demand or risk being barred from giving evidence of it. (Code Civ. Proc., § 454.) The copy often shows the defenses: an express contract whose shorter deadline has run, payments never credited, goods that were returned, or a ledger assembled after the fact.

What to bring to the first meeting

The ledger or accounts receivable report, exported with entry dates.
Invoices, purchase orders, delivery receipts, and statements sent.
Any signed agreement, credit application, or terms and conditions.
Emails or texts about the balance, including promises to pay.
If you were sued, the summons, the complaint, and the date of service.

Frequently asked questions

A customer has owed my company on a running account for two years with no signed contract. Can I still sue in California?

Usually yes. California gives a creditor four years to sue on a book account, which is a running record of debits and credits kept in the regular course of business. Two years of nonpayment is inside that window. The harder question is whether your records qualify as a book account or only document an oral contract, which generally has a two-year deadline unless it was for the sale of goods.

What is an open book account in California?

It is a claim for the balance due on an account that a creditor keeps as its principal record of transactions with a debtor. Under Code of Civil Procedure section 337a, the record must show debits and credits, be entered in the regular course of business, and be kept in a reasonably permanent form. "Open" means a balance is still owed.

What is the statute of limitations on a book account in California?

Four years under Code of Civil Procedure section 337, subdivision (b). Courts generally measure the period from the last entry in the account. Once the creditor stops extending credit and demands the full balance, a later partial payment may not reopen the account.

Can I recover attorney fees on a book account claim in California?

Sometimes, in a limited amount. Civil Code section 1717.5 awards fees to the prevailing party on a book account that has no fee clause. Since January 1, 2026, the cap for business accounts is the lesser of $1,600 or 25 percent of the principal for a winning creditor, and up to $1,600 for a defendant found to owe nothing.

I was served with a common counts complaint for a debt my business does not recognize. What should I do first?

Note the service date, because a California summons calls for a written response within 30 days. Then demand a copy of the account in writing. Under Code of Civil Procedure section 454, the plaintiff must deliver it within ten days or risk losing the right to offer evidence of the account. Compare it against your own payment records.

Talk to a California breach of contract attorney

If your business is carrying an unpaid account, or has been sued on one, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. is located at 327 Magnet, Irvine, CA 92618, and represents businesses in Orange County, Los Angeles, and throughout California.

This page provides general information about California law and is not legal advice. Outcomes depend on the records, the facts, and the court.