My cousin, Caroline, says that, if the cover of this book does it justice, it is not worth reading. Her grandfather believes that a book ought not to be judged by its cover. In this case, I think they are both right; for the book is at least as good as was the curate’s egg. Like him, the reader should persevere to the end; but the ghastliness which Caroline perceived in the cover was a true forecast of the grim effort I had to make to achieve that goal.

In his foreword Professor Goode of Oxford wrote: “What is so striking about the book is the intellectual rigour with which the author addresses the very difficult theoretical problems underlying the law of set-off. The answers to these are not merely of academic interest. On the contrary, they are of vital importance to the practitioner and his client on a wide range of highly practical issues, from the shipowner’s right to withdraw a vessel for alleged default in payment of hire to the right to set off claims and cross-claims in foreign exchange transactions or international commodity dealings.” Obviously the first right, to which the professor referred, has nothing directly to do with the law of banking. Still it (or something like it) is mentioned in the author’s text at pp. 93 f. The reader is not surprised, because Dr McCracken discloses in her preface that, despite her title, “considering [set-off’s] potential application in the very specific context of banking” is only the second aspect of her “primary focus”. The first (and here one encounters the “intellectual rigour” remarked by Professor Goode) is “identifying a possible rationale for the operation of set-off”.

In view of the judicial conflicts of terminology and perhaps even of principle, of which academics and practitioners alike are aware and whereof the author gives numerous examples, the sensible search for such a rationale is an enterprise highly to be praised and the publication of its results much to be welcomed. The good sense of the enterprise is initially evident in the first part of the book, which comprises but a single chapter and is devoted to what I conceive to be the author’s subsidiary focus (though, so far as I can recall she identifies nothing as such). It demonstrates that a bank’s “ability in certain circumstances to apply a credit balance on the account of a customer against a debt balanced on another account of the same customer and to pay to the latter only the difference between the two amounts” is not an application of set-off and dismisses it from the argument.

Dr McCracken maintains that, while that ability of a bank is only a mechanism for determining whether or not the bank is indebted to its customer and so obliged to honour the customer’s mandates, set-off requires the existence of two separate debts and takes three forms. First, where the parties are solvent, set-off is the discharge in whole or in part of one debt by the other in the circumstances stipulated by equity, or set out in Statutes of 1729 (a temporary Act) and 1735 (8 G. 2 c. 24), or agreed by contract. Secondly, again where the parties are solvent, set-off is the appropriation by contract of the amount of one debt to the payment in whole or in part of the other. Finally, where one or both of the parties are insolvent, set-off is the ineluctable discharge in whole