Part IV Priorities, 17 Other Priority Issues
Hugh Beale, Michael Bridge, Louise Gullifer, Eva Lomnicka
- Credit — Guarantees and security — Debt — Set-off
This chapter considers the priority conflict between creditor interests and another creditor’s security interest or title retention right. The availability of set-off rights to a debtor is not usually expressed as presenting an issue of priority in respect of that debt when debt is assigned by the creditor. This is because the debtor is not asserting a proprietary interest in its own indebtedness when claiming to set-off, against the assignee, the claim that it has against the assignor. For instance, if A owes money to B and B assigns that debt in favour of C, whether outright or by way of charge, A will be entitled to rights of set-off so long as, in the case of legal set-off, A’s entitlement to do so does not arise after A has notice of the assignment in favour of C.