The difference between legal and equitable set-off may now be noted.
1. In a legal set-off the amount claimed must be an ascertained sum of money, but in an equitable set-off the claim may be allowed even with respect to an unascertained sum of money.
2. In a legal set-off the court is bound to entertain and adjudicate upon the plea when raised. In the case of an equitable set-off, however, it is not obligatory on the court to adjudicate upon it and the defendant cannot claim it as a matter of right. The court has the discretion to refuse to take notice of the equitable set-off if the investigation into the equitable claim is likely to result in delay.
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ADVERTISEMENTS:
3. In a legal set-off it is not necessary that the cross-demands arise out of the same transaction, but an equitable set-off is allowed only when the cross-demands arise out of the same transaction.
4. In a legal set-off the amount claimed to be set-off must be legally recoverable and not barred by limitation at the date of the suit, but a claim by way of equitable set-off can be allowed even if it is barred at the date of the suit where there is a fiduciary relationship between the plaintiff and the defendant.
