Rights of set-off

(redirected from Rights 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 ?
The Bankruptcy Code does not provide an independent setoff right, but instead preserves substantive rights of setoff that already exist under applicable federal or state law.
[The Borrower] [Each Loan Party] consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against [the Borrower] [each Loan Party] rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of [the Borrower] [each Loan Party] in the amount of such participation.