In terms of the common law of set off, there are four basic
requirements which need to be met, before debts can be set-off
against each other.
Firstly, there must be reciprocal debts between the same parties
in the same capacities. This is better known as the 'mutuality
requirement'. Secondly, the debts must be of the same nature.
Thirdly, both debts must be due, owing and payable and therefore
enforceable and lastly, both debts must be liquidated. The notion
of a liquidated debt means that the debt must be easily
ascertainable, quantifiable and proven.
Notwithstanding the above, in some instances, certain contracts
are subject to an automatic set-off in respect of an implied right
of common law set-off with no requirement for express or written
consent and notice required. However, in order to deal with this
seemingly inequitable circumstance, Section 90(2)(n) of the
National Credit Act 34 of 2005 (NCA) comes into play and this
section renders a credit
