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Defalcation

1. Defaulting on a debt or other obligation such to account for public or trust funds. Usually used in the context of public officials. 2. Defalcation has another legal meaning referring to the setting-off of two debts owed between two people by the agreement to a new amount representing the balance.

► 1. Defaulting on a debt or other obligation such to account for public or trust funds.

Usually used in the context of public officials.

► 2. Defalcation has another legal meaning referring to the setting-off of two debts owed between two people by the agreement to a new amount representing the balance.

I owe you $7 and you owe me $3; we agree to "defalk"; the result is that I owe you $4.

This is a form of novation.

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Unless otherwise noted, this article was written by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public!). It is not intended to be legal advice and you would be foolhardy to rely on it in respect to any specific situation you or an acquaintance may be facing. In addition, the law changes rapidly and sometimes with little notice so from time to time, an article may not be up to date. Therefore, this is merely legal information designed to educate the reader. If you have a real situation, this information will serve as a good springboard to get legal advice from a lawyer.

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