The defences of set-off and abatement (2014) 25 10 Cons.Law 20 [Archived]
The defences of set-off and abatement (2014) 25 10 Cons.Law 20 [Archived]

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • The defences of set-off and abatement (2014) 25 10 Cons.Law 20 [Archived]
  • Legal set-off
  • Abatement
  • Equitable set-off
  • Exclusion or extension of set-off rights
  • Set-off under the Construction Act
  • Conclusion

This article appears as originally published in Construction Law on 1 December 2014 and is not maintained.

A variety of defences are available against claims involving the use of set-off or abatement. Martyn Naylor of 4 Pump Court explains how several different types can be used in different circumstances.

Key points

  1. A party faced with a claim for payment may reduce or extinguish that claim by raising the defence of set-off

  2. There are several different types of set-off, including legal and equitable set-off and abatement

  3. Each form of set-off is available in slightly different circumstances, depending on the nature of the cross-claim and its relation to the claim itself

  4. Contractual provisions may limit or expand the rights of set-off available to the parties

  5. The Construction Act 1996, as amended, requires the paying party to serve a pay less notice or it will lose its right to raise matters of set-off or abatement

There are usually two sides to a construction dispute. A contractor might have a perfectly good claim for payment, but its employer may be aggrieved about delay or defective work. Alternatively, the party from whom payment is sought may be owed money under a separate contract. The respondent will want to ensure that its liability is extinguished or reduced as far as possible. It will therefore need to rely on