- Guarantees and security — Cross-claims
This chapter talks about how set-off is the process by which a claim is reduced or eliminated upon account being taken of a cross-claim. Set-off comes in a number of different forms arising by operation of law. Some of these forms may be expanded or abbreviated (even eliminated) by a contract between the relevant parties. There are also several rules that bear a close resemblance to set-off but that technically are, or may be, distinct. These include the ability of a buyer, receiving defective goods, to deduct a sum representing their diminished value from the purchase price claimed by the seller if he has not already paid the price; the adjustment at intervals of a running account between two parties; and the contractual netting processes that take place in financial and other markets.
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