If parties have mature and liquidated claims of an identical nature vis-à-vis each other, each party may declare the set-off of these claims. Set-off is not admissible if the contract contains an explicit or implicit (e.g. a "net cash against..." clause) prohibition of set-off. The parties may also agree on the set-off of these claims by contractual consent.
1 The right to set-off mutual claims is based on the idea that it would be against good faith if a creditor requires performance of an obligation from his debtor if the creditor would have to return immediately what he has received from the debtor (“dolo agit, qui petit, quod statim redditurus est”).
2 Set-off based on an agreement of the parties may either have the direct effect of extinguishing the claims to be set-off ("contractual set-off") or may give one party the unilateral right to declare set-off irrespective of the requirements set forth in the rule, i.e. maturity, liquidated and identical nature of claims ("contract to allow set-off").
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Please cite as: "Commentary to Trans-Lex Principle No. III.1 - Set-off, http://www.trans-lex.org/916000"
1 The right to set-off mutual claims is based on the idea that it would be against good faith if a creditor requires performance of an obligation from his debtor if the creditor would have to return immediately what he has received from the debtor (“dolo agit, qui petit, quod statim redditurus est”).
2 Set-off based on an agreement of the parties may either have the direct effect of extinguishing the claims to be set-off ("contractual set-off") or may give one party the unilateral right to declare set-off irrespective of the requirements set forth in the rule, i.e. maturity, liquidated and identical nature of claims ("contract to allow set-off").