.png)
.png)
CONOR BRINDLEY explains the continuing relevance of Spargo’s Case
KEY POINTS
- A mutual obligation between parties to pay monies.
- Setting off can equate to payment.
- This can dispense with the need for short-term finance.
The case of Re Harmony and Montague Tin and Cooper Mining Co Spargo’s Case (1873) 8 Ch App 407 established the principle that where A’s obligation to pay a sum of money to B is set off against B’s obligation to pay an equal sum of money to A the setting-off of one payment obligation against another is the same as the making of the appropriate cash payments.
The result is that neither party is required to make a cash payment. In his judgment Mallish LJ stated the principle as follows:
“Nothing is clearer than that if parties account with each other and sums are stated to be due...
Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
