Rights of set-off

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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
a creditor is precluded from exercising any right of set-off in respect of the obligation due from the company (with the exception of the limitations provided for by the DIFC Netting Law No.
Borrowers have waived any right of set-off against the relevant loans, and Danish legislation prohibits the exercise of set-off against mortgage loans funded through covered bonds.
Money can be taken out of your account when you authorise a payment, via a court order, or when you owe the bank money and they invoke their "right of set-off".
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").
Right 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 ...
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.