recoupment

/rakuwpmant/ To recover a loss by a subsequent gain.

In pleading, to set forth a claim against the plaintiff when an action is brought against one as a defendant. A keeping back something which is due, because there is an equitable reason to withhold it. A right of the defendant to have a deduction from the amount of the plaintiffs damages, for the reason that the plaintiff has not complied with the cross-obligations or independent covenants arising under the same contract. It implies that plaintiff has cause of action, but asserts that defendant has counter cause of action growing out of breach of some other part of same contract on which plaintiffs action is founded, or for some cause connected with contract. The right of the defendant to have the plaintiffs monetary claim reduced by reason of some claim the defendant has against the plaintiff arising out of the very contract giving rise to plaintiffs claim. First Nat. Bank of Louisville v. Master Auto Service Corp., C.A. Va., 693 F.2d 308, 310.

Unlike a counterclaim, recoupment only reduces plaintiffs claim; it does not allow recovery of affirmative money judgment for any excess over that claim. Tuloka Affiliates, Inc. v. Moore, 275 S.C. 199, 268 S.E.2d 293, 295.

Recoupment is a purely defensive matter growing out of transaction constituting plaintiffs cause of action and is available only to reduce or satisfy plaintiffs claim and permits of no affirmative judgment. Schroeder v. Prince Charles, Inc., Mo., 427 S.W.2d 414, 419.

Recoupment is the equivalent of the old counterclaim in which a defendant sets up a claim owed to him by the plaintiff though it need not arise out of the same transaction as the plaintiffs claim and the defendant may not recover more than the amount claimed by the plaintiff against him. Under rules practice, recoupment has been replaced by the modern counterclaim.

See also counterclaim

Set-off distinguished.

A "set-off is a demand which the defendant has against the plaintiff, arising out of a transaction extrinsic to the plaintiffs cause of action, whereas a "recoupment" is a reduction or rebate by the defendant of part of the plaintiffs claim because of a right in the defendant arising out of the same transaction. Zweck v. D P Way Corp., 70 Wis.2d 426, 234 N.W.2d 921, 924.

See also set-off