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What is an accounting?

On behalf of Sheftall & Associates, PA posted in blog on Thursday, April 19, 2018.

There are many reasons why a dispute might arise between two parties in a contract. Questions of performance, either in quality of timeliness, are a common problem. But in close relationships between businesses, particularly in international trade, questions over the misuse of money are also very common.

If you feel that your partners or a contracted company are mishandling money, you may have the upper hand under Florida law. By simply demanding an accounting of the money in question you can put the burden of proof on the defendant in a civil suit if you have proper grounds to request it.

Simply put, accounting is a formal statement of the disbursement and disposition of all money that is involved in any kind of contractual agreement. That could include a legal partner or contractor. Any party which has provided funds as part of an agreement has a right to a full accounting of how the money has been spent.

The applicable term is “fiduciary duty.” It simply means that the parties have a responsibility to each other, to be honest, and transparent about all matters relating to money.

Such an accounting does not have to be a part of the contract or agreement which binds the parties, but it does help to be explicit. When any kind of relationship between partners or companies is formed, the transfer of money for any purpose should come with the right to a full accounting expressly stated for the highest standard of transparency.

Importance in Florida jurisdiction

If you are ever in a situation where you believe that funds transferred as part of a contract have been misused, including but not limited to fraud, you can demand an accounting. Under Florida law, it is incumbent on the party that received the funds to provide it.

This can be particularly useful for international business transactions. The complexities of multiple jurisdictions and the onus of proof are made much more clear under Florida law. By filing a civil suit for any potential misuse in Florida, the burden of proof can be placed on the defendant to provide a full accounting of the funds in question.

How it works

It is not necessary to always file a lawsuit to obtain a full accounting if there is a dispute over money. But under Florida law, the burden of proof can be placed so firmly on the defendant that the possibility of a suit can bring a swift reconciliation.

That is why it is important to consult a business litigation attorney for any dispute that has dragged on without a satisfactory resolution. You do have options for resolving it favorably, even without a trial. Under Florida law, you may have such a strong hand that it is very much in the interest of someone who has a fiduciary duty to you to settle before it goes to court.