Accounts Receivable Collections

It is on the basis of contract law that accounts receivable are collected pursuant to litigation. In any services arrangement between parties there is either a written or a verbal agreement for one party to provide what is often professional services to another. When this relationship to render services is entered into, a contract exists between the parties. In any services agreement a written contract is preferable so that the terms such as price and quantity or quality may be determined by reference to the contract. Otherwise, a simple verbal agreement leaves details and terms to memory which may be disputed if litigated. A written contract specifically sets forth all terms in stone. Nothing may be added or deleted from the written contract except by agreement.

Courts regularly enforce contract terms against a party in breach of the contract. Often summary judgment may be rendered in litigation where the breach is not disputed and it is obvious to the judge as to what has occurred. This cuts short the need for trial of the matter to obtain a judgment. In more complicated cases trial may be required. For accounts untimely and unpaid, a breach of contract has occurred and a plaintiff may seek money damages for amounts owing, plus attorney’s fees, if allowed in the agreement, and costs of court. For these accounts owing, judgment is the likely outcome in favor of the plaintiff.

Execution on a judgment is allowed by the court. This occurs where assets or money in the bank or other financial deposits of the defendant are levied and attached by a local constable to satisfy and pay the amount of the judgment. All assets of the defendant are available to pay the judgment except for exempt assets provided for the debtor’s benefit in the homestead exemption law of Utah.

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