If the plaintiff claims as assignee or transferee under a person with whom the contract sued on was originally made, and the defendant's claim exceeds the plaintiff's demand, the defendant:
§ 8.01-423.When plaintiff claims as assignee or transferee.
Chapter 15. Payment and Setoff · Last amended 1977 · Last verified July 16, 2026
In one sentenceSection 8.01-423 lets a defendant sued by an assignee or transferee, whose counterclaim exceeds the plaintiff’s demand, either waive the excess or bring the original contracting party into the case by rule so a jury can render judgment against that person for the amount beyond what the plaintiff sought.
Full Text of § 8.01-423
1. In his counterclaim, may waive the benefit of his claim as to any excess beyond the plaintiff's claim, whereupon, the further proceedings shall be upon the plaintiff's claim and the defendant's counterclaim as a defense thereto; or
2. Instead of such waiver such defendant may, by rule issued by the court, to which rule shall be attached a copy of the counterclaim and served on the person, under whom plaintiff claims as aforesaid, make such person a party to the action; and, on the trial of the case, the jury shall ascertain and apply, the amount and interest to which the defendant is entitled; and, for any excess beyond the plaintiff's demand for which such person under whom the plaintiff claims as aforesaid is liable, with such interest as the court or jury allows, judgment shall be rendered for the defendant against such person.
Plain-English Summary
This section addresses an assignment scenario: the plaintiff sues as an assignee or transferee of a contract originally made with someone else, and the defendant’s counterclaim against the underlying obligation is worth more than what the plaintiff is asking for. The defendant has a choice about what to do with that excess.
One option is to waive it: the defendant gives up any claim to the amount beyond the plaintiff’s demand, and the case proceeds on the plaintiff’s claim with the counterclaim serving only as a defense to it.
The other option brings a new party into the case. By rule of court, with a copy of the counterclaim attached and served, the defendant can pull in the person under whom the plaintiff claims — the original contracting party. At trial, the jury determines the amount and interest the defendant is entitled to, and for whatever exceeds the plaintiff’s demand, judgment goes against that original party, with whatever interest the court or jury allows.
Frequently Asked Questions
What happens when a defendant’s counterclaim is worth more than what an assignee-plaintiff is suing for?
The defendant can either waive the excess beyond the plaintiff’s claim, or bring the original contracting party into the case to pursue the excess against them.
How does a defendant bring the original contracting party into the lawsuit?
By rule issued by the court, with a copy of the counterclaim attached and served on that person.
Who ends up owing the excess if the defendant chooses not to waive it?
The person under whom the plaintiff claims — the party with whom the contract was originally made — becomes liable for the excess, plus interest.
What does the jury decide once the original party is brought in?
The amount and interest to which the defendant is entitled, and the resulting judgment against the original party for any excess beyond the plaintiff’s demand.
Does this section apply to every contract dispute, or only assignment cases?
It applies specifically where the plaintiff sues as an assignee or transferee under a person with whom the contract was originally made.
Amendment History
Code 1950, § 8-246; 1954, c. 619; 1977, c. 617.
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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