Examples may include simple liquidated debts, damages for breach of contract, claims for differences under contracts held by both parties, etc. Network Network has various types which need to be distinguished. The most common is close-out netting, considered to be "the cancellation of a series of open executory contracts between parties in the event of default by the other party and the offsetting of the resulting profits and losses." It is usually carried out in three phases, cancellation, calculation and compensation. Another type is compensatory compensation, which is an early compensation of obligations arising from contracts that have not yet expired. “This type of network is a classic case of novation.” Legal position of compensation and set-off The position of the law in jurisdictions regarding these concepts depends on the times in which these concepts are to be used. This period can be broadly divided into the category before insolvency and after the initiation of insolvency proceedings. Having compensation available before a party becomes insolvent is not a problem as the law does not have to deal with money owed to third parties by the insolvent. Therefore, the main difference that emerges from the law in different jurisdictions is based on insolvency