Legal updates

A debt cannot be offset against another transaction when it is not a fixed amount and without details

November 18, 2021

A landowner commissioned an agricultural work and although the laborer performed the works, the landowner did not pay for such on the grounds that the laborer did not complete other work requested to perform.

The Court accepted the claim and held that no consideration could be offset for another transaction when it was not a fixed or detailed debt. Under Israeli law, due consideration that parties owe each other from one transaction may be offset by a notice from one to another. When it comes to consideration that does not result from the same transaction, such may only be offset if it is a fixed amount. Also, an offsetting claim must be detailed and accurately present the data and facts on which it is based. Even if the laborer performed only partial work, it is a consideration arising from another transaction and it is not a fixed amount, but only general claims raised without sufficient details. Therefore, it is not possible to deduct the amount for the work even if it is not completed.