Abstract
This paper mainly describes grounds, examples, and standards of abuse of the right to set-off. Frequently a debtor couples his admission of a debt with the assertion that he is entitled to set off a claim of his own against the debt. "Set-off", both at law and in equity, is that right which exist between two parties, each of whom under an independent contract owes an ascertained amount to the other, to set off his respective debt by way of mutual deduction, so that in any action brought for the larger debt the residue only, after such deduction, shall be recovered. There are many doubtful points in the history of compensatio (set-off). In the case of a banker(argentarius)and of the purchaser of a bankrupt's estate (bonorum emptor) a different course prevailed: the formula itself was modified. We must not suppose that compensatio (set-off) was originally looked on as a means of extinguishing an obligation. In theory of law, each debt subsisted separately. Set-off's effects were retroactive, and may be said to have commenced from the moment when the two debts first began to exist together. Under justinian the debts were held to operate as mutually extinguishing each other ipso jure. But, the civil code of Japan and the german civil code regulate: The set-off is made by declaration to the other party. The declaration is ineffective, if made subject to any condition or limitation of time. Set-off has three functions: (1)Equity (2)Simplicity (3)Lien and (4) Self-help. The Supreme Court decided that set-off has a function as lien, and is then stretched unlimited. The exercise of right is unlawful if its purpose can only be to cause damage another. Furthermore, no abusing of rights is permissible. Set-off is also a right. So no abusing of the right to set-off is permissible.
