When it comes to settling mutual debts between individuals or businesses, a set off agreement can be a useful tool. This legal agreement allows parties to offset their debts against one another, ultimately resulting in a single payment that settles both debts. If you`re looking to draft a set off agreement for mutual debts, here`s a template to get you started.
Introduction
This set off agreement („Agreement”) is made between [Party A] and [Party B] („Parties”), both of whom agree to set off their mutual debts against one another as outlined below.
Debt Obligations
Party A owes [Debt Amount] to Party B, while Party B owes [Debt Amount] to Party A. The Parties agree to set off these debts against one another to the extent of their respective debt obligations.
Settlement
The Parties agree to settle their mutual debts through a single payment. Party A shall make a payment of [Settlement Amount] to Party B, which shall satisfy both Parties` debt obligations to one another.
Release and Discharge
Upon receipt of the settlement payment, both Parties agree to release and discharge one another from any and all claims, demands, and actions related to the debts that were set off through this Agreement.
Representations and Warranties
Both Parties represent and warrant that they have the legal authority to enter into this Agreement and that all information provided regarding their debt obligations is accurate and complete.
Governing Law
This Agreement shall be governed by and construed in accordance with the laws of [State/Country], and any disputes arising from or related to this Agreement shall be resolved in accordance with the dispute resolution provisions outlined below.
Dispute Resolution
In the event of any dispute arising from or related to this Agreement, the Parties shall first attempt to resolve the dispute through good faith negotiations. If the dispute cannot be resolved through negotiation, the Parties agree to submit the dispute to mediation before pursuing any formal legal action.
Conclusion
A set off agreement for mutual debts can be an effective way to settle debts between parties. By using the template above, you can create a legal agreement that outlines the debt obligations, settlement terms, and dispute resolution provisions needed to facilitate a successful settlement. Remember to consult with legal professionals before finalizing any agreement to ensure its compliance with your state or country`s laws.
