Recoupment refers to a legal doctrine or process that allows a defendant to offset or reduce the amount of damages owed to a plaintiff by asserting a claim for damages or a related counterclaim arising from the same transaction or occurrence. Unlike setoff, which involves asserting a separate and unrelated claim as a defence, recoupment typically involves asserting a claim that arises directly from the same transaction or occurrence that forms the basis of the plaintiff’s claim. Recoupment allows defendants to seek compensation for damages, losses, or other expenses incurred as a result of the plaintiff’s actions or breach of contract, while also defending against the plaintiff’s claims. This legal doctrine aims to promote fairness and efficiency by allowing parties to resolve related disputes in a single proceeding and to avoid the need for separate lawsuits or proceedings to address overlapping issues. The availability and scope of recoupment may vary depending on the jurisdiction and the specific legal principles and requirements applicable to the case.
A recovery of what had been lost.
- Direct or indirect recovery of funds spent (such as Research & Development (R&D) costs) on an activity (such as from licensing the resulting know-how).
- The right of a defendant to claim elimination or reduction of the plaintiff’s claim due to plaintiff’s breach in performing the same contract (or failure to fulfil the terms of the same transaction) that is the subject matter of the case.
n. the right of a defendant in a lawsuit to demand deduction from the amount awarded to plaintiff (party bringing the suit) of a sum due the defendant from the plaintiff in the transaction which was the subject of the lawsuit. Example: Laura Landlord sues Tillie Tenant for nonpayment of rent, Tenant is entitled to deduct a deposit made at the commencement of the lease, or an amount Landlord received from re-renting the apartment before the lease expired. A recoupment is not the same as an “offset” (setoff), which can be money owed from any matter, including outside the lawsuit.
A recovery of expenses; a reduction or withholding for legitimate reasons, of part or all of an owed amount; a defendant’s right to have part of the plaintiff’s claim reduced as the result of a breach of contract by same in the course of the same deal.
In the music industry, Recoupment is the common practice of claiming an advance provided to an artist back from that artist rather than from related sources.
Many record labels practice recoupment, and most new artists have little choice but to accept it since they lack the negotiating power to obtain a better contract.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 29th March, 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/recoupment/
- Modern Language Association (MLA):Recoupment. dlssolicitors.com. DLS Solicitors. April 27, 2024 https://dlssolicitors.com/define/recoupment/.
- Chicago Manual of Style (CMS):Recoupment. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/recoupment/ (accessed: April 27, 2024).
- American Psychological Association (APA):Recoupment. dlssolicitors.com. Retrieved April 27, 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/recoupment/