Legal Definitions - defalk

The term defalk is an archaic legal term, meaning it is rarely used in modern legal practice. It refers to the act of deducting a debt or setting off a claim against another financial obligation.

In simpler terms, to "defalk" means to reduce the amount owed by one party by subtracting a counter-debt or a valid claim that the owing party has against the creditor.

Here are some examples to illustrate this concept:

• Contractual Dispute: Imagine a scenario where a construction company, "BuildRight Inc.," owes a subcontractor, "SteelBeam Co.," a final payment of $50,000 for structural work. However, SteelBeam Co. had previously caused damage to some of BuildRight Inc.'s specialized equipment during the project, costing BuildRight Inc. $10,000 in repairs. BuildRight Inc. might seek to defalk the $10,000 repair cost from the $50,000 owed to SteelBeam Co., thereby reducing their final payment to $40,000.

  Explanation: BuildRight Inc. is reducing its debt to SteelBeam Co. by setting off its own claim for damages against the amount it owes, directly illustrating the act of defalking.

• Estate Settlement: Consider an individual, Mr. Henderson, who is a beneficiary in his late aunt's will, set to inherit $75,000. However, before her passing, Mr. Henderson had borrowed $15,000 from his aunt, which he had not yet repaid. The executor of the aunt's estate might decide to defalk the outstanding loan amount from Mr. Henderson's inheritance. This would mean Mr. Henderson would receive $60,000 instead of the full $75,000.

  Explanation: The estate is deducting a debt owed by Mr. Henderson from the money he is due to receive, which is a direct application of defalking a debt.

• Service Agreement: A homeowner, Ms. Chen, hired "GardenPro Landscaping" to redesign her backyard for a total cost of $12,000. After the work was completed, Ms. Chen discovered that GardenPro had accidentally damaged her underground irrigation system, requiring $1,500 in repairs by another company. When it came time for the final payment, Ms. Chen informed GardenPro that she would be defalking the $1,500 repair cost from the total, offering to pay $10,500.

  Explanation: Ms. Chen is reducing her payment obligation to GardenPro by subtracting her valid claim for the cost of repairs, demonstrating the concept of setting off a claim against a debt.