Set-Off Rights

Set-Off Rights

The right of set-off (and the related right of recoupment) is recognized in common law as an equitable remedy (e.g., avoids “the absurdity of making A pay B when B owes A”), as well as in bankruptcy settings (11 U.S.C § 553) and commercial sales transactions (UCC § 9-340).

As reflected in the following exemplars, the parties may agree to include a contractual set-off right, which may require the party exercising such right to provide notice and create a record of any amounts set-off or recouped:

Exemplar C66-1

In addition to any right of setoff or recoupment provided by law, all amounts due to Forwarder will be considered net of indebtedness of Forwarder. Supplier will have the right to set off against or to recoup from any payment or other obligation owed to Forwarder, in whole or in part, any amounts due to Supplier from Forwarder or any providers, carriers, and subcontractors that Forwarder procured to perform the Services. Supplier will provide Forwarder with a statement describing any offset or recoupment taken by Supplier.

Exemplar C66-2

In addition to any right of set-off provided by law, all amounts due or to become due to the Supplier from the Company shall be considered net of indebtedness of the Supplier (and/or the Supplier’s affiliates) to the Company (and/or the Company’s affiliates), and the Company may deduct or set-off at any time any such indebtedness from any amounts due or to become due to the Supplier (and/or the Supplier’s affiliates) from the Company (and/or the Company’s affiliates).

Exemplar C66-3

Any payment received by Company from Customer may be applied by Company against any obligation owing by Customer to Company, regardless of any statement appearing on or referring to such payment, without discharging Customer’s liability for any additional amounts owing by Customer to Company. The acceptance by Company of such payment shall not constitute a waiver of Company’s right to pursue any remaining balance. With respect to any monetary obligations of Company to Customer, including without limitation, volume rebates and advertising rebates, Company may, at any time, setoff and appropriate and apply such amounts against any sums that are, or will become, owing, due or payable to Company by Customer under these Terms and Conditions or any other agreement.