Recoupment Legal Definition
In Pacific Concrete F.C.U. v. Kauanoe, 62 Haw. 334, 614 P.2d 936 (1980), the Hawaii Supreme Court stated:
The term "recoupment" developed under principles of common law and described a claim that defendant could assert against plaintiff only if it arose from the same transaction as plaintiff's claim. It is in the nature of a defense and can only be asserted to reduce, diminish or defeat the plaintiff's claims. A unique characteristic of common law recoupment is that it permits the defendant to raise a claim without regard to the statute of limitations which would apply if the defendant brought an affirmative action on the same claim."
Id. at 338, 614 P.2d at 939.
Hawaii's definition of "recoupment" differs from New Hampshire's definition which states as follows:
The doctrine of recoupment in a contract action permits the defendant to reduce or eliminate the plaintiff's damages, or seek its own damages in excess of the damages claimed by the plaintiff, either because the plaintiff has not complied with a cross obligation of the contract or because the plaintiff violated another duty under the contract. If recoupment is used merely to defeat the plaintiff's claim, rather than to recover excess amounts, it is known as "defensive recoupment." Bezanson v. Hampshire Meadows Development Corp., 144 N.H. 298, 742 A.2d 112, 115-17 (N.H. 1999) .