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8 Chile

Marcelo Armas M

From: Set-Off Law and Practice: An International Handbook (3rd Edition)

Edited By: William Johnston, Thomas Werlen, Frederick Link

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 28 May 2024

Banks and cross-border issues — Liquidated and unliquidated monetary obligations — Contractual set-off — Insolvency set-off — Judicial set-off

This chapter examines the law of set-off in Chile, both before and after insolvency, as well as the alternatives for contractual set-off structures that may be agreed among two or more parties. In Chile, set-off was created as a legal concept primarily on the basis of practical considerations rather than juridical principles. The right to set-off may arise due to a contractual arrangement between the parties or by the operation of law, including the Chilean Civil Code. The chapter first considers set-off in Chile outside insolvency, focusing on set-off by operation of law and contractual set-off, before discussing set-off in insolvency. In particular, it explains the implications of a declaration of liquidation under Chilean Bankruptcy Law and its possible consequences for set-off rights. It also analyses issues arising in cross-border set-off.

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