In any action on a contract, the defendant may file a pleading, alleging any matter arising out of the transaction which would entitle him to relief in equity or at law, including (i) failure in the consideration of such contract, (ii) fraud in such contract's procurement, (iii) breach of any other provision of such contract, (iv) breach of any duty imposed upon the plaintiff by law in the making or performance of such contract, or (v) any other matter arising out of the transaction that would entitle the defendant to recover damages from the plaintiff, or the person under whom the plaintiff claims, in whole or in part, against the obligation of the contract; or, if the contract be by deed, alleging any such matter arising under the contract, existing before its execution, or any such mistake therein, or in the execution thereof, or any such other matter arising out of the transaction as would entitle him to such relief in equity or at law; and in either case alleging the amount to which he is entitled by reason of the matters contained in the pleading. If the amount claimed by the defendant exceeds the amount of the plaintiff's claim, the court or jury may, in a proper case, give judgment in favor of the defendant for such excess.
§ 8.01-422.Pleading recoupment.
Chapter 15. Payment and Setoff · Last amended 2020 · Last verified July 16, 2026
In one sentenceSection 8.01-422 lets a defendant in a contract action plead recoupment — failure of consideration, fraud, breach, or any other matter arising from the same transaction that would entitle the defendant to relief — and recover judgment for any amount by which that claim exceeds the plaintiff’s demand.
Full Text of § 8.01-422
Plain-English Summary
Recoupment lets a defendant fight back within the same lawsuit instead of filing a separate action. In any action on a contract, a defendant can plead facts arising out of the same transaction that would justify relief in equity or at law — the contract failed for lack of consideration, it was procured by fraud, some other provision of it was breached, the plaintiff breached a legal duty tied to making or performing it, or some other transaction-related matter would entitle the defendant to damages from the plaintiff or whoever the plaintiff claims through.
Contracts under seal get the same treatment, with the pleading instead alleging a matter arising under the contract, existing before it was signed, or a mistake in the contract or its execution. Either way, the defendant has to state the amount claimed under the recoupment theory. And if that amount turns out to exceed what the plaintiff sought, the court or jury can enter judgment for the defendant for the difference — recoupment is not limited to canceling out the plaintiff’s claim, it can flip into an affirmative recovery.
Frequently Asked Questions
What is recoupment in a Virginia contract action?
A defense in which the defendant pleads matters arising from the same transaction as the contract — such as failure of consideration, fraud in procurement, or breach — that would entitle the defendant to relief against the plaintiff’s claim.
Can a defendant recover more than just canceling out the plaintiff’s claim?
Yes. If the amount the defendant is entitled to under the recoupment pleading exceeds the plaintiff’s claim, the court or jury may give judgment in favor of the defendant for the excess.
Does recoupment apply to contracts under seal?
Yes, with the defendant instead alleging a matter arising under the contract, existing before its execution, or a mistake in the contract or its execution.
What must a defendant include in a recoupment pleading?
The facts giving rise to the claim and the amount to which the defendant claims entitlement by reason of those matters.
Is recoupment limited to breach-of-contract theories?
No. It reaches failure of consideration, fraud in procurement, breach of the contract or of a legal duty tied to it, and any other matter arising out of the transaction that would entitle the defendant to relief.
Amendment History
Code 1950, § 8-241; 1954, c. 617; 1977, c. 617; 2020, c. 1211.
Source & verification. Section text and amendment history are
reproduced verbatim from the Code of Virginia, published by the
Code of Virginia, Virginia Division of Legislative Automated Systems. Last verified July 16, 2026.
· Official source
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