Setoff
/ˈsɛtˌɔf/
Definitions
- (n.) The right to reduce a debt by asserting a counterclaim against the creditor.
The debtor asserted a setoff to reduce the amount owed.
- (v.) To apply a debt owed to one party against a debt owed by that party to another.
The parties agreed to set off their mutual debts.
Forms
- set-offs
- set off
- set offing
Related terms
See also
Commentary
Setoff is distinct from recoupment in that it typically arises from separate transactions, allowing parties to balance mutual debts in litigation or payment contexts.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.