Equitable Set-Off

Equitable set-off is a legal principle that allows a debtor to offset a claim they owe to a creditor with a counterclaim against that creditor. For example, if you owe money to a business, but that business also owes you money for a service you provided, equitable set-off lets you reduce your debt by the amount they owe you. This principle promotes fairness by allowing both parties’ financial obligations to be settled together, rather than requiring one party to pay their debt while waiting for the other to pay theirs.