Legal Set-Off

Legal set-off is a legal process that allows a debtor to reduce the amount they owe to a creditor by asserting a counter-claim or asserting that the creditor owes them money. Essentially, if both parties owe each other debts, they can offset these amounts so that only the net difference needs to be paid. This mechanism ensures fairness and efficiency by preventing double payment of debts where mutual liabilities exist, provided the claims are legally valid and recognized by the court or law.