The Value Of Set-off

Set-off right is categorized into statutory set-off, contractual set-off and set-off in bankruptcy. The three kinds of set-off are all derived from the statutory set-off on civil law, while they are different in legal prescription and application. They overlap each other and connect with each other, and thus compose the structure of set-off right. This dissertation collected legal restrictions of these three kinds of set-off separately, and analyzed on these restrictions inclusively. Through such analysis, a better understanding of the value of set-off right will be reached.It is recognized that the major values of set-off right are: 1. set-off can simplify the transaction and save the cost; 2. set-off can serve as a lien; 3. set-off promote fairness. This common theory is right, however, it is too general to understand the essence of set-off right. This dissertation looked deep into the value of set-off, to see the value conflict and value balance.Set-off promote fairness. But if all parties in set-off have different interests and their interests conflict, it is necessary to prioritize. The restrictions on set-off right show that, the interests are prioritized according to the following rules: 1. human being's survival interest is preferable; 2. a corporation's survival interest is also preferable; 3. set-off in good faith should be strongly protected.Set-off can save the cost of transaction and serve as a lien. This means that the set-off right holder gets advantage over other creditors, however, it ruins the fairness. In different fields, set-off is chosen to play different roles. In banking, set-off is used to grasp economic advantage while the fairness is abandoned. On the contrary, in insolvency procedure, set-off is used to promote fairness, while the economic interest is not emphasized.