The Michigan Supreme Court decided to grant leave to appeal to hear whether the four-year limitations of the Uniform Commercial Code, or Michigan’s general six-year limitations period applies to collections actions on an open account.
As this blog previously mentioned, the Michigan Court of Appeals ruled, in Fisher Sand and Gravel v Sweebe, that the four-year limitations period applied. The Court of Appeals ruled that the four-year statute of limitations applied, despite the open agreement being a separate contract. The court reasoned that the open account existed “solely to facilitate [the] sale of goods.” The Court of Appeals also noted that its ruling was consistent with court cases from other states and that the UCC’s purpose of promoting uniformity among states with respect to transactions in goods was met.
Although a decision from the Supreme Court will not be announced for some time, we will be sure to keep you updated.
