There is a legal doctrine business owners should be aware of: Account Stated. The Minnesota Supreme Court has recognized this doctrine for over one hundred years. In a nutshell, the doctrine holds that if invoices are sent for a sufficient period of time without objection from the debtor, the amount invoiced is deemed admitted.
The creditor does have an obligation to prove the underlying basis for the invoice. But, so long the invoice is not a pure fabrication, this should be relatively simple.
A question that arises consistently in relation to this doctrine is: What's a sufficient period of time? This is a fact question with an answer that varies depending on the circumstances. I have seen opinions from Minnesota courts accepting periods as short as 6 months be sufficient. In every opinion I have read where invoices are sent regularly for over 12 months, it has been held to be a sufficient period of time.
Businesses are well served to continue sending invoices to non-paying clients. You may not realize it, but by doing so you're solidifying your case!
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.