The basic aim of this paper is to formulate rigorous conservation equations for mass, momentum, energy and entropy for a watershed organized around the channel network. The approach adopted is based on the subdivision of the whole watershed into smaller discrete units, called representative elementary watersheds (REW), and the formulation of conservation equations for these REWs. The REW as a spatial domain is divided into five different subregions: (1) unsaturated zone; (2) saturated zone; (3) concentrated overland flow; (4) saturated overland flow; and (5) channel reach. These subregions all occupy separate volumina. Within the REW, the subregions interact with each other, with the atmosphere on top and with the groundwater or impermeable strata at the bottom, and are characterized by typical flow time scales.The balance equations are derived for water, solid and air phases in the unsaturated zone, water and solid phases in the saturated zone and only the water phase in the two overland flow zones and the channel. In this way REW-scale balance equations, and respective exchange terms for mass, momentum, energy and entropy between neighbouring subregions and phases, are obtained. Averaging of the balance equations over time allows to keep the theory general such that the hydrologic system can be studied over a range of time scales. Finally, the entropy inequality for the entire watershed as an ensemble of subregions is derived as constraint-type relationship for the development of constitutive relationships, which are necessary for the closure of the problem. The exploitation of the second law and the derivation of constitutive equations for specific types of watersheds will be the subject of a subsequent paper.