Definition
A cross demand is a claim asserted by a defendant against a plaintiff that arises out of the same transaction or subject matter as the plaintiff's original claim, or that otherwise operates as a countervailing obligation between the same parties. The term functions as a procedural umbrella covering demands a defendant may bring forward to offset, reduce, or extinguish the plaintiff's claim — most commonly through set-off or counterclaim.
The concept rests on the idea that when two parties stand as mutual debtors and creditors, a court of equity or law can adjudicate both demands together rather than requiring separate actions. The cross demand does not always need to arise from the same transaction as the original claim (as a compulsory counterclaim does), but it must be a liquidated or legally cognizable claim capable of being asserted in the same proceeding.
Common Confusion
CROSS DEMAND, SET-OFF, AND COUNTERCLAIM: These three terms are frequently used interchangeably in older sources, but they carry distinct procedural meanings in modern practice. A set-off is a specific type of cross demand — typically a liquidated debt owed by the plaintiff to the defendant, independent of the transaction at suit, asserted to reduce or extinguish the plaintiff's recovery. A counterclaim is broader: it may arise from the same transaction (compulsory) or an unrelated one (permissive), and it can seek affirmative relief exceeding the plaintiff's claim. Cross demand is the historical and general term that encompasses both, functioning as a descriptor rather than a precise procedural category. Researchers reading older authorities should not assume that "cross demand" maps cleanly onto any single modern procedural device.
Why It Matters in Research
Cross demand is primarily a historical and descriptive term. Modern procedural codes — particularly after the merger of law and equity under the Federal Rules of Civil Procedure and analogous state reforms — replaced the vocabulary of "cross demand" with the more precisely defined concepts of counterclaim, set-off, and recoupment. Researchers working in pre-merger sources (pre-1938 federal practice; earlier in some states) will encounter cross demand as the operative term where modern materials would use counterclaim.
The key navigational challenge is that older treatises and cases use cross demand, set-off, and counterclaim with overlapping and sometimes inconsistent scope. A 19th-century case discussing whether a "cross demand" may be asserted in a given court may be addressing questions that are now resolved by Rule 13 of the Federal Rules of Civil Procedure or its state equivalents — but the translation is not automatic, because the equitable and legal rules governing when such demands could be joined were far more fragmented before procedural merger.
Researchers should also note the companion term CROSS ERRORS, flagged in Rapalje & Lawrence in the same entry: when a respondent in a writ of error assigns errors of its own, the errors on both sides are collectively called cross errors. This is a distinct appellate procedure concept, not a variant of cross demand, and the shared "cross" prefix should not mislead researchers into treating the two as related doctrines.
For researchers tracing the history of defendant's remedies, cross demand serves as a useful index term in older digests and encyclopedias, often leading to the substantive law of set-off and recoupment that underlies modern counterclaim doctrine.
Historical Dictionary Support
Rapalje & Lawrence define cross demand concisely as "a set-off; a demand which may be the subject of counter-claim or set-off." This brief entry accurately captures the term's function as a procedural category encompassing both set-off and counterclaim without distinguishing between them — reflecting the looser procedural vocabulary common before code pleading consolidated and renamed these devices. The entry is notable for treating cross demand and set-off as near-synonyms, which aligns with how equity courts historically approached mutual debts between the same parties. What the entry does not address — and what historical dictionaries of this period generally underserve — is the question of when a cross demand may seek affirmative relief beyond the plaintiff's claim, a distinction that became central once the counterclaim emerged as a defined procedural tool. Researchers relying solely on Rapalje & Lawrence will find the term accurately described but analytically underdeveloped relative to later procedural doctrine.
Jurisdictional Note
The viability and scope of cross demands varied significantly between courts of law and courts of equity before procedural merger, and between states that adopted code pleading at different times. In equity, cross demands grounded in mutual indebtedness were more readily entertained; at common law, the right of set-off was largely statutory. Researchers working in jurisdictions that retained separate law and equity courts into the 20th century should account for which court's rules applied to the cross demand at issue.
Encyclopedia Cross-Reference
The Law Mind Contracts & Commercial Law Encyclopedia: Performance — Demand for Adequate Assurances (UCC §2-609, Restatement §251)