- Banks and cross-border issues — Debt — Insolvency set-off
This chapter discusses the principle of set-off in South Africa in relation to common law and legislation, both outside and within the context of insolvency. It considers set-off between solvent parties and set-off against insolvent parties, along with cross-border issues arising from set-off in both cases. With regard to solvent parties, illegal debts or debts prohibited by statute, or certain debts such as alimony or taxes due to the fiscus, cannot be set off. Debts that have already prescribed prior to the necessary mutuality of debts arises also cannot be set off under the common law. Under insolvency, set-off is not valid and binding unless all the common law requirements exist before the insolvency of one of the parties to an agreement (and when the concursus creditorum is established).
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