Examples may include simple liquidated debts, damages for non-performance of a contract, claims for differences under contracts held by both parts, etc. The most common is close-out netting, which is considered “the cancellation of a series of enforceable contracts between the parties in the event of default by the counterparty and the netting of the resulting gains and losses.” It is generally done in three steps: cancellation, calculation and triggering. Another type is settlement netting, which consists of early compensation for contractual obligations that have not yet expired. “This type of compensation is a classic case of novation.” Legal position of set-off and set-off The position of law in jurisdictions with respect to these concepts depends on when these concepts are to be used. This period can be broadly divided into two categories: before insolvency and after the opening of insolvency proceedings. Having compensation available before one party becomes insolvent is not a problem since the law does not have to deal with the case of an insolvent who owes money to third parties. Therefore, the main difference that appears in the laws of different jurisdictions is based on insolvency.