Rights of set-off

(redirected from Right of Setoff)

Rights of set-off

An agreement defining each party's rights should one party default on its obligation. A setoff is common in parallel loan arrangements.

Rights of Set-Off

A portion of a loan agreement stating the rights of each party should one party or the other default on his/her obligations. Rights of set-off are most often stated explicitly when two parties are lending money to each other. See also: Parallel loan.
References in periodicals archive ?
analysis of potential exemptions or defenses or to unclaimed property compliance, such as business to business debts, foreign-owned property or foreign transactions, right of setoff, and federal preemption
extension of the common law right of setoff in New York Debtor &
This right of setoff will need the approval of the new landlord's lenders, and the tenant will want the lender to agree in a non-disturbance subordination and attornment agreement to be expressly bound by this setoff right in the event it forecloses or otherwise becomes the owner and landlord.
The entity has an unconditional and legally enforceable right of setoff and
Enterprises, (2) the Court of Appeals for the Federal Circuit (CAFC) affirmed the Court of Federal Claims (COFC) holding as stated above, limiting the Government's right of setoff.
The company may want to ensure that its director's contractual agreements provide for a right of setoff.
10, "Omnibus Opinion 1966"), SAB 92 points out that offsetting assets and liabilities has generally been prohibited except where a right of setoff exists.
The EITF abstract for this issue also includes Securities and Exchange Commission staff guidance on determining the appropriate discount rate and the right of setoff between the recourse obligation and other related assets.
The right of setoff requires that subject debts and credits be mutual in three respects: the debts must be owed between the same persons or entities; these persons must owe and be owed the debts in the same legal capacities such as a distinction between an individual capacity and that as a trustee; and the debts must be owed contemporaneously.
The commonwealth's obligation to make rental payments is absolute and unconditional, without right of setoff, counterclaim or abatement, subject only to annual legislative appropriations.
Banks jealously guard the common law right of setoff.
Under the terms of the Credit Facility, additional remedies available to the lenders (as long as an event of default exists and has not been cured) include acceleration of all principal and accrued interest outstanding, the right to foreclose on related security interests in the assets of the Company and stock of its subsidiaries, and the right of setoff against any monies or deposits that the lenders have in their possession.