Difference between Legal and Equitable Set-off – Answered!
3. In a legal set-off it is not necessary that the cross-demands arise out of the same transaction, but an equitable set-off is allowed only when the cross-demands arise out of the same transaction.
4. In a legal set-off the amount claimed to be set-off must be legally recoverable and not barred by limitation at the date of the suit, but a claim by way of equitable set-off can be allowed even if it is barred at the date of the suit where there is a fiduciary relationship between the plaintiff and the defendant.