agreement between the parties involved to set off one debt against another or one loss against a gain. A banker is empowered to set off a credit balance on one account against a debit balance on another. It is usual in these circumstances for the bank to issue a letter of set-off, which the customer countersigns to indicate agreement., offset - a deduction; a contrary claim or demand by which a given claim may be lessened or canceled. A claim that serves to counterbalance or to compensate for another claim.