What is set-off (verrekening) under Dutch law?

Dutch term: Verrekening | Legal basis: Articles 6:127-6:141 BW

Set-off (verrekening) under articles 6:127 to 6:141 of the Dutch Civil Code is the extinguishment of two mutual debts by declaration of one of the parties. If party A owes 100,000 euro to party B and party B owes 60,000 euro to party A, party A can set off its debt by declaring verrekening, leaving only a net 40,000 euro obligation.

Set-off requires that both debts are due and payable, that the parties owe each other in the same capacity, and that the party invoking set-off is entitled to pay its own debt. Set-off operates by unilateral declaration and does not require the other party's consent. It can be invoked at any time, including during court proceedings.

Why it matters for international businesses

For international businesses, set-off is a practical tool for managing mutual obligations across a trading relationship. It can also serve as a defensive strategy against a payment claim.