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Set-off: Difference between revisions
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{{subrogation setoff}} | {{subrogation setoff}} | ||
==The varieties and mysteries of set-off== | ==The varieties and mysteries of set-off== | ||
===Contractual set-off=== | ===Contractual set-off=== | ||
Where each party to a transaction owes the other they may agree that, instead of making separate payments, the party due to make the larger payment should simply pay the difference. Set off provisions in the {{isdama}} and {{gmsla}} tend to go a lot wider, and allow (on default) a non-defaulting party to offset amounts owing against any liabilities of any kind owed by the defaulting party. This is clearly a drastic step and ordinarily would only be exercised as an utter last resort. See: | Where each party to a transaction owes the other they may agree that, instead of making separate payments, the party due to make the larger payment should simply pay the difference. Set off provisions in the {{isdama}} and {{gmsla}} tend to go a lot wider, and allow (on default) a non-defaulting party to offset amounts owing against any liabilities of any kind owed by the defaulting party. This is clearly a drastic step and ordinarily would only be exercised as an utter last resort. See: | ||
*{{gmslaprov|Set-off}} ({{tag|GMSLA}}) | *{{gmslaprov|Set-off}} ({{tag|GMSLA}}) | ||
*{{isdaprov|Set-off}} ({{tag|ISDA}}) | *{{isdaprov|Set-off}} ({{tag|ISDA}}) | ||
===[[Insolvency set-off]]=== | |||
=== | ''You can’t contract out of [[insolvency set-off]] under {{t|English law}}.'' | ||
{{insolvency set-off capsule}} | |||
===[[Banker’s set-off]] (a.k.a ''[[combination of accounts]]''=== | ===[[Banker’s set-off]] (a.k.a ''[[combination of accounts]]''=== | ||
This arises where a customer has multiple bank accounts some of which are in debit and some in credit. It is also known as the [[combination of accounts]]. It is arguably available in any situation where one party has multiple accounts with another. | This arises where a customer has multiple bank accounts some of which are in debit and some in credit. It is also known as the [[combination of accounts]]. It is arguably available in any situation where one party has multiple accounts with another. | ||
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The question arises as to whether it is available across multiple currencies. | The question arises as to whether it is available across multiple currencies. | ||
===[[Equitable set-off]]=== | |||
This is a self-help remedy available to a debtor whose cross-claim arises from the same transaction (or a closely related transaction) as the original debt. Under this device a debtor simply deducts its claim from the debt it owes and tenders any balance to the creditor. The sums in question must be due or, if representing unliquidated damages, a [[good faith]] and reasonable assessment of the loss. (Contrast with set off at law, which requires the claims to be determined by judgment of the courts). | |||
In {{casenote|Geldof Metaalconstructie|Carves}} [2010] EWCA Civ 667 the leading judgment confirmed the equitable test as being “whether the cross-claim is ... so closely connected with the claimant’s demand that it would be manifestly unjust to allow it to enforce payment without taking into account the cross-claim.” | |||
=== | ===Cross-affiliate set-off=== | ||
{{crossaffiliate setoff}} | |||
==[[Chicken Licken]]’s Guide{{tm}} to things that might defeat [[set off]]== | ==[[Chicken Licken]]’s Guide{{tm}} to things that might defeat [[set off]]== | ||
{{assignment and set off}} | {{assignment and set off}} | ||