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In this video, Michelle discusses the principle of set-off, which applies in situations where mutual debts exist between parties. Set-off can be relevant in legal defenses if someone is being sued or during bankruptcy proceedings when a trustee seeks to collect funds. It can also relate to bank accounts when a person owes money to a bank. Set-off frequently occurs in everyday situations, such as when a person owes money to a friend who also owes them. For set-off to apply, three basic elements must be met, although the video does not specify these elements in detail.
