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Parties sometimes agree a contractual right of set off, for example, when they have an ongoing business relationship; alternatively, they may agree to exclude set-off rights. So, taking the example above, if B owes A £800,000 under a contract which excludes set off rights, B would have to pay to A the whole £800,000, even though A separately owes B £200,000.
Aug 6, 2019 · Where the right of set off arises, it can act as a defence to part or the whole of a claim. Example: when the right of set off arises, if B owes A £800,000, but A in fact owes B £200,000, B can set off that £200,000 when A claims its £800,000, and pay to A only the balance of £600,000. The maths is simple, but the more difficult area is ...
Jul 6, 2022 · Law of set-off. Set-off is a common law right allowing parties (each of which being both a creditor and a debtor) that have debts owing to each other to set them off. Where the right of set-off is applicable, the parties can net their payment obligations, and, as a result, will be liable to pay the remaining balance only.
by Practical Law Canada Commercial Transactions. A Practice Note discussing set-off (and related remedies) in or relating to commercial agreements between business entities, where one entity, A, retains amounts that it owes to another entity, B, and applies the retained amounts against amounts owed to it by B. It addresses legal, equitable, and ...
Aug 6, 2019 · Where the right of set off arises, it can act as a defence to part or the whole of a claim. Example: when the right of set off arises, if B owes A £800,000, but A in fact owes B £200,000, B can ...
Jan 8, 2024 · A set-off clause is a small but impactful provision that your company can include within a commercial contract. These clauses allow clients to deduct any owed amounts from their payments to the service provider. It essentially enables both parties to offset their financial claims, removing what is owed from the amounts due under the agreement.
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Jun 8, 2020 · In Mujtaba v. Yasin, 2020 ONSC 2554, Justice Emery addressed the two types of set-off: legal set-off and equitable set-off. Legal set-off is provided for in section 111 of the Courts of Justice Act, which states: “in an action for payment of a debt, the defendant may, by way of defence, claim the right of set off against the plaintiff’s ...
