Explanation of Article 296
This article addresses the statement of "judicial set-off," which is the set-off that is effected by a court ruling. The article stipulates that the court may adjudicate judicial set-off in cases where the conditions for legal or contractual set-off are not met. For example, if the two debts are not of the same type, not due for performance, or not free from dispute, in such cases, the court may adjudicate judicial set-off between them.
It should be noted that judicial set-off leads to the "extinguishment of the obligation," so no legal effect is imposed on the two debts after the set-off.
This article is considered one of the most important articles related to judicial set-off, as it explains how the obligation is extinguished and enumerates its methods.
Related To
Article 296
Without prejudice to any legal provision, a claim for any of the following rights made against a party denying such rights may not be heard upon the lapse of five years:
a) Rights of professionals, such as physicians, lawyers, and engineers, for professional services they rendered and for expenses they incurred.
b) Renewable periodic rights, such as the rent of real property, wages, regular payments, and the like. As an exception, a claim may not be heard upon the lapse of 10 years if the right is a revenue in the possession of a holder acting in bad faith or a revenue an administrator of an endowment must pay to a beneficiary.