Duhaime's Law Dictionary


Set-Off Definition:

An alleged cross claim by a defendant against the plaintiff which, if successful, would result in the reduction of elimination of the plaintiff's claim.

Related Terms: Recoupment

In Nesi Energy, relying in part on Halsbury's Laws of England, the Alberta Court of Queen's Bench adopted these words:

"Set-off is a two-way street.

"By definition, it requires that there be cross-claims between the parties.

"Where A has a claim for a sum of money against B and B has a cross-claim for a sum of money against A such that B is, to the extent of his cross-claim, entitled to be absolved from payment of A’s claim, and to plead his cross-claim as a defence to an action by A for the enforcement of his claim, then B is said to have a right of set-off against A to the extent of his cross-claim.

"The existence of a cross-claim is prerequisite."

In his book on the subject, jurist Derham, after issuing the typical law author caution about how "difficult" it is to define a word upon which he then proceeds to write a 921-page book(!), says that set-off:

"... can be defined as the setting of money cross-claims against each other to produce a balance.

"The essence of set-off ... is the existence of cross-demands."

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