set-off


set-off
index counterclaim, drawback

Burton's Legal Thesaurus. . 2006


set-off
n.
A counterclaim brought by a defendant against a plaintiff that arises out of a different matter from that raised in the plaintiff’s complaint, and that the defendant hopes to use to recover some amount from the plaintiff, thereby reducing or canceling the damages due to the plaintiff.

The Essential Law Dictionary. — Sphinx Publishing, An imprint of Sourcebooks, Inc. . 2008.


set-off
the plea that there exists a debt owed to the debtor by the creditor so that the creditor's claim against the debtor should be extinguished or reduced to the extent of that debt. Set-off is limited to money claims and is a ground of defence rather than a substantive claim.

Collins dictionary of law. . 2001.


set-off
Where a debtor has a cross-claim against a creditor, to the reduction or extinguishment of the creditor's claim by the amount of his cross-claim. There are four types of set-off (the first three of which may be extended by contract):
Legal set-off. This can only be resorted to as a defence to a court action and is available where the two claims are liquidated or ascertainable with certainty and are both due and payable at the commencement of the action. The two claims do not have to arise from the same transaction or closely connected transactions. (In sale agreements, a set-off provision may, for example, set off claims under the warranties (warranty) against claims for deferred consideration).
Equitable set-off. This is available to a debtor outside the context of litigation where his cross-claim arises from the same transaction (or a closely related transaction) as the debt owed. Either and probably both of the claims may be for an unliquidated sum. A debtor can simply deduct the amount of his mutual cross-claim from the debt he owes and tender the balance of the debt (if any) to the creditor. However, the sums in question must be due and payable or, in the case of unliquidated damages, must be a reasonable assessment of the loss made in good faith.
Banker's set-off. This arises in a situation where a customer has more than one account with his bank, at least one of which is in debit and one of which is in credit. It is also known as the right to combine accounts. It is arguably of wider commercial application and could be available in any situation where one party has two or more accounts with another. A debtor can only invoke banker's set-off if the two accounts are current or running accounts. This remedy can be automatically exercised without formality.
Insolvency set-off. The rules of insolvency set-off are mandatory and may not be varied by contract. Where a creditor proves in a liquidation or bankruptcy, an account must be taken of the mutual dealings between the creditor and either the company in liquidation or the bankrupt and the sums due from one party must be set off against the sums due from the other, except that sums due from the insolvent shall not be taken into account if the other party had notice at the time they became due of either a resolution or petition to wind-up (if a company), or of a pending bankruptcy petition (if a natural person). All claims, including future, contingent and unliquidated sums, must be brought into account.
+ setoff / set-off
USA
setoff, Also known as set-off.
In the context of bankruptcy, a creditor's right under the Bankruptcy Code to apply a debt owing to it by the debtor against a debt it owes to the debtor, if the parties owe each other mutual prepetition debts arising from different transactions. Unlike recoupment, a creditor's right of setoff is subject to the automatic stay. If the creditor can obtain relief from the automatic stay, it may apply the debt owed to it by the debtor to reduce the amount it owes the debtor. The creditor may be paid in full before other creditors to the extent of its right to setoff.
Common law and state statutes also grant limited rights of set-off as self-help remedies for debtors (for more information see Practice Note, Set-off Rights (www.practicallaw.com/3-381-7653)).
Related links

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.


set-off
A demand made by the defendant against the plaintiff that is based on some transaction or occurrence other than the one that gave the plaintiff grounds to sue.

Dictionary from West's Encyclopedia of American Law. 2005.


set-off
A demand made by the defendant against the plaintiff that is based on some transaction or occurrence other than the one that gave the plaintiff grounds to sue.

Short Dictionary of (mostly American) Legal Terms and Abbreviations.

Synonyms: