Research On The Application Of The Right Of Setoff In Civil Litigation

As one kind of right of formation, right of setoff is a kind of right prescribed in the civil substantive law. The performance of setoff right can not only save the parties to an action from the trouble of paying each other and save their expenses of performance, but also free the party who performs first from suffering damage for it can secure the creditor’s right, which is prescribed in Article99, Section100in Contract Law of PRC. In civil litigation, the defendant can offer to countervail creditor’s rights in order to ban down creditor’s litigant appeal. But in our country, Civil Procedure Law does not provide rules and regulations related the application of Setoff Right in civil litigation. Due to the lack of uniform provisions, judicial practices differ from one another as for the claim of setoff right, which is harmful to the protection of the right of parties and also leads to the low efficiency of legislation. Therefore, it is in bad need of improving the rules and regulations about setoff right in civil litigation.In this paper, the setoff in civil litigation refers to the claims made by defendants.Setoff in litigation is a kind of legal behavior, which also has the nature the same as the behaviors in private law. Therefore, parties should follow the rules and regulation in procedural law and their constructive requirements should conform to the regulations of civil law when exercising the right of setoff. Defendants should put forward the claims of setoff before the end of the debate in trial the court. Plaintiffs may propose claims of anti-setoff against defendants so as to get the full support of their requests from the court. It is banned to propose claims of setoff in the litigation which the parties have entered into arbitration, which is a kind of respect for the parties and also an indispensable requirement of maintaining the effectiveness of arbitration agreements. As for the obligee’s rights which have jurisdictional agreements, whether defendants are allowed to declare setoff claims should be determined by whether the court has jurisdiction over the obligee’s right claimed by defendants. The court should only hear and decide the cases about setoff after affirming plaintiffs’rights of oblige. When defendants propose multiple causes of defense, the court should first examine other causes of defense and examine setoff defense only when these defenses are not valid. Objections of plaintiffs about the setoff claims of defendants do not lead to the invalidity of setoff rights. Courts needn’t examine whether the objections of plaintiffs are valid, but need explain them to plaintiffs. In this way, it can not only secure the realization of setoff right, but also protect against plaintiffs’abuse of setoff right. Defense of setoff is not a subject matter and do not lead to the outcomes of lawsuit. Whether the defense of setoff has effect of res judicata should be decided on the basis of the differences of specific cases.The setoff system in developed countries is relatively sound both in legislation and theoretical research. Procedural law in Germany, Japan, Britain and America provide specific regulations on setoff right while our country does not. In the civil and commercial activities in our country, the exercise of setoff right is mainly based on the Section99, Section100and Section83of Contract Law. Therefore, it is essential to learn from and take in the successful methods of foreign countries so as to perfect the related aspects about setoff right in substantive law and procedural law.