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The obligee may exercise the right of set-off until the obligor has asserted the expiration of the limitation period.

 

COMMENT

 

As the obligee’s right continues to exist, it can be used for set-off if the prerequisites of set-off under Article 8.1 are met.

 

Illustration

 

1. The facts are the same as in Illustration 2 to Article 10.9, except that A not only asks for the return of the press, but also for the payment of the unpaid rent. B is entitled to set off its counterclaim for damages against this monetary claim despite the expiration of the limitation period.

 

Although the expiration of the limitation period does not in itself extinguish the right of the obligee, the situation changes when the obligor invokes the time bar as a defence by asserting it against the obligee. By so doing, the obligor makes the limitation period effective, with the consequence that the right can no longer be enforced. Since set-off may be considered the self-enforcement of a right, it is not available after the defence of the expiration of the limitation period has been invoked.

 

Illustration

 

2. The facts are the same as in Illustration 1, except that B requests the payment of damages and threatens to sue four years after having had the repairs done. A objects, asserting that the machine broke down due to B’s fault. Since this is hard to prove, A in a letter to B also invokes the time bar under Article 10.2(1). B can no longer set off its claim for damages.

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