The following Banking & Finance practice note provides comprehensive and up to date legal information covering:
Set-off is a complex yet important concept in legal proceedings generally and for many different types of transaction.
Independent set-off and transaction set-off can both be used as a defence in legal proceedings. For more information, see Practice Notes: Independent set-off and transaction set-off and Pleading set-off.
In commercial transactions, transaction set-off will be an important right for a party who is claiming breach of contract as a defence to a claim for payment under that contract. Contracting parties may also specifically cater for set-off in their written contract, either by extending or limiting the scope of rights of set-off between them. For more information, see Practice Note: Contractual set-off .
Contractual set-off, insolvency set-off and banker's set-off will be important for many finance transactions. For more information, see Practice Note: Set-off in finance transactions.
Set-off is also frequently used in the construction industry to manage cash flow. For more information, see Practice Note: Set-off in construction.
Set-off can also often arise within the context of landlord and tenant relations with regard to setting off rent. For more information, see Practice Note: Set-off and deductions from rent.
In certain circumstances, set-off rights arise between two parties who owe each other monetary debts.
Set-off is the discharge of reciprocal monetary obligations where one monetary amount is discharged to the extent of the other monetary amount.
A right of set-off allows one
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