What is a setoff clause?
A set-off clause is a legal clause that gives a lender the authority to seize a debtor’s deposits when they default on a loan. A set-off clause can also refer to a settlement of mutual debt between a creditor and a debtor through offsetting transaction claims.
What is the rule of set-off?
In other words, a set-off is the right of a debtor to balance mutual debts with a creditor. Any balance remaining due either of the parties is still owed, but the mutual debts have been set off.
What is set-off in a contract?
A set-off contract is a contract that involves a set-off clause, which is a legal provision that allows a lender to seize a debtor’s deposits if they default on a loan. In general, set-off clauses are used in loan agreements between lenders and borrowers.
What is used to set-off which clauses?
Use a pair of commas in the middle of a sentence to set off clauses, phrases, and words that are not essential to the meaning of the sentence.
What is set-off in CPC?
The concept of set off, as stated hereinbefore, is a claim set up against the plaintiff which has the effect of reduction or discharge of a party’s debt or claim.
Why is set-off important?
Why is set-off important? Set-off is the ability of a debtor to reduce or eliminate entirely the debtor’s liability to a creditor by taking into account monies owed by the creditor to the debtor. In litigation set-off operates as a defence to a claim rather than a separate stand-alone counterclaim.
What is set-off example?
Where the right of set off arises, it can act as a defence to part or the whole of a claim. Example: when the right of set off arises, if B owes A £800,000, but A in fact owes B £200,000, B can set off that £200,000 when A claims its £800,000, and pay to A only the balance of £600,000.
What are the types of set-off?
There are five main types of set-off:
- independent set-off (sometimes known as legal set-off or statutory set-off)
- transaction set-off (also known as equitable set-off)
- contractual set-off.
- insolvency set-off, and.
- banker’s set-off (sometimes known as current account set-off)
What are the two types of set-off?
In the legal set off the amount which is recovered is ascertained and within the pecuniary jurisdiction of the court. In the equitable set off the amount which is recovered must be ascertained and the case is admitted at the discretion of the court. In legal set off the court fees are to be paid by the defendant.
What is set-off in claim?
(Entry 1 of 2) 1 : the reduction or discharge of a debt by setting against it a claim in favor of the debtor specifically : the reduction or discharge of a party’s debt or claim by an assertion of another claim arising out of another transaction or cause of action against the other party.
Who can claim set-off?
Set off is reciprocal acquittal of debts. The meaning of Set-off is claim set up against another. It can be claimed by the defendant in the plea of defence.
Does set-off mean separate?
c : to set apart : make distinct or outstanding. 2a : offset, compensate more variety in the Lancashire weather to set off its most disagreeable phases — Geog.