Discharge by Set-Off

Discharge by set-off occurs when two parties owe each other money, and instead of paying each other, they offset their debts against one another. For example, if Party A owes Party B $500, and Party B owes Party A $300, they can set off the amounts. After the set-off, Party A would owe Party B only $200. This method simplifies transactions and allows both parties to settle their accounts without making physical payments. It effectively reduces the total amount owed, helping both parties fulfill their obligations efficiently.