Set-Off
"Can set-off be executed automatically?"
Quick Answer
The legal right to extinguish mutual, due, and homogenous debts between two parties up to the amount of the smaller debt, simply by unilateral declaration.
Scope and Legal Distinctions
Statutory set-off has conditions relating to reciprocal obligations and their enforceability. A disputed amount or a contractual no-set-off clause requires separate assessment.
What to Check in Practice
Identify both debts, parties, currencies, maturity and the declaration of set-off; distinguish it from an agreed account reconciliation.
Sources & Authorities
Statutory framework and official guidance for this definition.
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