Recoupment Definition

1) The reduction of a successful plaintiff's judgment by an amount the plaintiff owes the defendant arising from the same transaction. For example, if a landlord wins an action against a tenant for failing to pay rent, the tenant might be entitled to recoupment for periods of time when the property was uninhabitable and, therefore, the tenant was not obligated to pay rent. 2) Generally, the recovery or collection of money that was paid out.