Also known as: offsets · offsetting · set-off · setoff
Written by attorneys · grounded in primary & secondary sources — see below
A credit or reduction applied against a claim, obligation, recovery, or distribution to balance or compensate for an opposing amount already paid, owed, or received from another source.
Oliver Okeke sued Olympus Banking in federal court claiming $90,000 in damages from an account error. After trial the court found he was entitled to only $60,000 once the bank established its right to withhold certain fees. Because the recovery fell below the jurisdictional threshold when computed without regard to the setoff, the district court denied costs to Oliver and imposed costs on him.
Orchard Farms LP authorized a cash distribution to its limited partners after selling equipment. Limited partner Odessa Okada owed the partnership unpaid lease damages on vehicles she had supplied. The general partner reduced her distribution share by the amount of those claims before paying any net amount, treating her as a creditor only for the remainder.
Select any source to read its text and confirm it supports the definition.
Overland Transport partnership voted to distribute proceeds from asset sales to its partners. Partner Oriana Oberman had outstanding obligations to the firm from prior vehicle repairs she had failed to reimburse. The managing partner applied an offset against her share equal to those obligations before releasing any funds to her.
Otis Olsen was interrogated after arrest without warnings. The Court noted that new procedural rules aim to offset the inherent pressures of custodial questioning that might otherwise produce unreliable statements, thereby protecting the integrity of any resulting confession.
Penn Central entered a lease allowing construction above Grand Central Terminal. The agreement provided that annual rents payable by the developer would be offset in part by the loss of concession income the railroad would suffer from displaced tenants during and after construction.
A political committee filing monthly reports with the FEC listed every person providing rebates, refunds, dividends, or interest as an offset to operating expenditures when the aggregate exceeded $200, thereby reducing the net expenditure totals shown on the disclosure forms.
A payment made in compensation for the same harm reduces the plaintiff's remaining claim at least to the extent of the payment, regardless of whether the payor was liable or named as a defendant. This prevents double recovery for a single injury.
Supporting sources
Once a partner becomes entitled to a distribution, the partnership may offset any amount the partner or dissociated partner owes it before paying the net sum. The partner retains creditor status only for the remaining balance.
Supporting sources
The statute directs courts to compute the amount in controversy without regard to any setoff or counterclaim to which the defendant may be entitled. A plaintiff who ultimately recovers less than $75,000 may therefore face denial or imposition of costs.
Supporting sources
When fair market value exceeds the foreclosure sale price, the deficiency defendant receives an offset equal to the difference after subtracting senior liens that survived foreclosure. The determination is not automatic and requires an affirmative request.
Supporting sources
…has been only to sift out undue pressure, not to assure spontaneous confessions.[^maj-11] The Court's new rules aim to offset these minor pressures and disadvantages intrinsic to any kind of police interrogation. The rules do not serve due process interests in preventing blatant coercion since, as I noted earlier,…