General legal information about contract terms in the UK, not legal advice.
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Set-off

Set-off allows a party to deduct sums owed to it by the other party from what it owes. Contracts often exclude set-off so that invoices are paid in full.

Prepared by a retired English qualified solicitor (LLB, LLM) · reviewed · applies across the UK unless stated · how we draft

In more detail

An exclusion of set-off must be reasonable under the Unfair Contract Terms Act 1977 where it applies.

In Scotland

In Scotland, set-off is called compensation.

Put it into a contract

Be Contract Wise provides very powerful, carefully prepared tools to draft and review simple or complex contracts under the law of England and Wales or Scots law, explaining every clause in plain English.

England & Wales appScotland app

Reviewed 2026-09-24. General legal information, not legal advice.