Ruth I Wahl
Edited By: William Johnston, Thomas Werlen, Frederick Link
- Guarantees and security — Contractual set-off — Insolvency set-off — Judicial set-off
This chapter discusses the law of set-off in Canada both outside and within insolvency. The law relating to set-off is very similar throughout Canada's provinces except Quebec. Set-off is thus a matter of provincial law in general and determining whether a set-off claim is valid and enforceable will depend on the law of the province where such claim is being asserted. The chapter first provides an overview of set-off between solvent parties in Canada, focusing on legal set-off, equitable set-off, statutory set-off, contractual set-off, set-off in relation to subsidiaries, and the right of set-off with regard to security interests. It then considers set-off against insolvent parties, taking into account bankruptcy proceedings under the Bankruptcy and Insolvency Act, receiverships, and reorganization proceedings under the Companies Creditors' Arrangement Act. It also examines issues that arise when the law of set-off is applied in a cross-border context.