Offset Legal Meaning and Definition

Here is a simplified definition of the legal term Offset.

Offset (noun, verb)

Definition: In law, an offset refers to the legal act of using a counterclaim or adjustment to reduce, cancel, or change the effect of a claim. Essentially, when a debtor and a creditor owe each other, one debt can be "offset" against the other, reducing the total owed. For instance, if person A owes person B $5000, but person B also owes person A $3000, the $3000 is offset against the $5000, resulting in person A owing only $2000 to person B.