Legal Definitions - compensatio

Compensatio refers to a legal principle where a defendant, when facing a claim from a plaintiff, asserts that the plaintiff also owes them money. The defendant then requests that the amount they owe the plaintiff be reduced by the amount the plaintiff owes them, effectively balancing or offsetting the mutual debts.

Here are some examples to illustrate this concept:

• Imagine a scenario where a software development firm (Plaintiff) sues a client (Defendant) for an unpaid invoice of $20,000 for custom software. The client, however, claims that the software firm caused damage to their server equipment during the installation process, incurring repair costs of $5,000. In this situation, the client could invoke compensatio, arguing that the $5,000 owed for server repairs should reduce the $20,000 they owe for the software, resulting in a net payment of $15,000 to the firm.

• Consider a situation where a catering company (Plaintiff) sues a venue owner (Defendant) for $7,000 for services provided at an event. The venue owner, in turn, claims that the catering company left the kitchen in a state requiring extensive professional cleaning, costing $1,500. The venue owner could use compensatio to argue that the $1,500 cleaning cost should be deducted from the $7,000 owed to the catering company, reducing their payment obligation to $5,500.

• Let's say a freelance writer (Plaintiff) sues a publisher (Defendant) for $4,000 for an article commissioned and delivered. The publisher, however, asserts that the writer failed to meet a deadline for a separate, earlier project, causing the publisher to incur $1,000 in late fees with their printer. The publisher could employ compensatio to reduce the $4,000 owed for the current article by the $1,000 penalty incurred due to the writer's previous delay, meaning the publisher would only pay $3,000.