Rights of set-off

(redirected from Right 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 ?
This loan will be through a directed issue to current holders of 2016:1 convertibles (issued in April 2016), with right of set-off, and, if needed, to a limited group of investors.
In the 2009 decision Caisse populaire Desjardins de l'Est de Drummond v Canada, (2) Rothstein J, on behalf of a majority of the Supreme Court of Canada (SCC), acknowledged, by extension, (3) that a transaction incorporating or prominently featuring a right of set-off may create a security interest under the Personal Property Security Act (4) ("PPSA").
To make it clear to persons responding to a call or request from the City that the Chief Financial Officer and Treasurer may choose to exercise any legal or equitable right of set-off against any person who becomes indebted to the City during the provision of their services and may re-direct payments to otherwise due to such person towards repayment of outstanding amounts owed to the City.
A 'back loaded' payment structure which is paid in instalments against the completion of specified milestones can also be used to enhance the employer's position, while employers should always look to include a clear right of set-off in the fit out contract.
The boards are proposing that offsetting should apply only when the right of set-off is enforceable at all times, including in default and bankruptcy, and the ability to exercise this right is unconditional, that is, it does not depend on a future event.
The warning signs noted in the state's press release are: 1) agreements where you waive your right to take legal action against the servicer or to take action challenging the foreclosure process (watch for words such as "borrower has no right of set-off or counterclaim" or "no defense related to the loan or the property"); 2) demands for advance payment of extra fees not included in the agreement, such as taxes, attorney fees and insurance costs; 3) failure to return your calls or respond to inquiries in a timely manner; 4) failure to respond to you entirely; or 5) lost documents.
65) The meaning of the words "become available"--whether the right has to be quantified, has matured, or has become payable--is left to the law governing the original contract, if the right of set-off arises from the original contract.
Apart from other inconsistencies, the laws do not provide the right of set-off to the employers against those increases.
Under FIN 39, organizations may offset the on-balance-sheet assets and liabilities of multiple derivatives contracts with a single counterparty and report the net amount only when the right of set-off is legally enforceable.
It is important to note, though, that courts will respect the landlord's right of set-off with respect to security deposits or prepaid rent which were at one time commingled, but are later segregated by the landlord if (a) such segregation occurs Prior to an assignment for the benefit of creditors or the commencement of a bankruptcy proceeding and (b) the landlord's commingling was inadvertent as opposed to a deliberate disregard of the law.
The Board of Directors is entitled to appoint one or more special auditors or a registered auditing company to examine any reports or plans prepared by the Board in accordance with the Swedish Companies Act in conjunction with any new issue of shares, warrants or convertible bonds that includes stipulations regarding contribution in kind or that subscription shall take place by virtue of a right of set-off or under other terms and conditions, a transfer of the company's own shares in return for non-cash consideration, a reduction in the share capital or the statutory reserve, a merger or a division of a limited company.
In Ohio and Kentucky, there are three elements which determine whether the action by the creditor bank is a set-off rather than a freeze or hold: The bank has made a decision to set-off the account; and the bank has taken some action which accomplishes the set-off; and the bank has made some record which evidences that the right of set-off has been exercised.