Section 342.- Set-off is made by a declaration of intention by one party to the other. A condition or time of commencement or ending cannot be added to such declaration.

The declaration of intention mentioned in the foregoing paragraph relates back in its effect to the time when both obligations could first have been set off.

 

Section 343.- A set-off may be made even though the place of performance of the two obligations is different ; but the party, who makes the set-off, must indemnify the other party for any damage caused thereby.

 

Section 344.- A claim, against which there is defence, may not be set off. Prescription does not exclude set-off, if the claim barred by prescription was not barred at the time at which it could have been set off against the other claim.

 

Section 345.- If an obligation arises from an unlawful act, the debtor cannot avail himself of a set-off against the creditor.

 

Section 346.- If a claim is not subject to judicial attachment, it is not subject to set-off.

 

Section 347.- A third debtor, who has received from the Court an order of prohibition of payment, cannot set up against the seizing creditor an obligation subsequently acquired by him.

 

Section 348.- If either party has several claims suitable for set-off, the party making the set-off may specify the claims which are to be set off against each other. If the set-off is declared without such specification, or if the other party objects without delay, the provisions of Section 328 paragraph 2 are applied mutatis mutandis.

If the party making the set-off owes the other party interest and costs in addition to the principal performance, the provisions of Section 329 are applied mutatis mutandis.

 

PART IV

NOVATION

 

Section 349.- When the parties concerned have concluded a contract changing the essential elements of an obligation, such obligation is extinguished by novation.

If a conditional obligation is made unconditional, or a conditional is added to an unconditional obligation, or if a condition is changed, it is regarded as a change of an essential element of such obligation.

A novation by a change of the creditor is governed by the provisions of this Code concerning Transfer of Claims.

 

Section 350.- A novation by a change of the debtor may be effected by a contract between the creditor and the new debtor, but this cannot be done against the will of the original debtor.