Rights of set-off

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 ?
It was not in dispute that the terms of the LMA syndicated loan facility were effective under the general law of contract to exclude the defendants' rights of set-off.
In addition to any rights of set-off a party may have as a matter of law or otherwise, upon the occurrence of an Event of Default with respect to a party .
However, notification of the debtor triggers a change in which the debtor may discharge its obligation, freezes the debtor's rights of set-off to those available at the time of notification and makes any change to the original contract subject to the actual or constructive consent of the assignee.
the debtor is not precluded from accumulating rights of set-off even after such a notification).
One assumption concerns the application of legal rights of set-off permitted by the court.
Continuing performance, disclaimer, amendment and assignment of executory contracts, and rights of set-off under the executory contracts are under review.
This decision will help define the ability of banks to exercise their rights of set-off against the accounts of a customer who is in bankruptcy.