A payment made during a running account with the purpose of reducing past indebtedness does not fall outside the running account defence under s 588FA(3) merely because one of its purposes is to reduce existing indebtedness, unless the parties expressly agree to a permanent reduction. A demand for payment before delivery on one occasion does not terminate or interrupt a running account where the parties continue to supply goods and make payments in circumstances implying continuation of the relationship. The dominant purpose of individual payments is relevant to the s 588FG(2) good faith defence (particularly for the last payment), not to the s 588FA(3) running account defence.
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