A more thorough explanation:

An offset is a way to balance out something else. This is often used in finance when one amount can balance out another amount. It can also be called a "setoff" when it comes to money. For example, if someone owes $30 to another person, but that person owes them $20, the second amount can offset the first amount. This means that the person only owes $10 instead of $30.

In a lawsuit, a defendant can use an offset as a counterclaim. This means that they don't deny the plaintiff's original demand, but they want to reduce the amount of money they owe by the amount that the plaintiff owes them. An offset can also be used as a defense to reduce damages by an amount that the defendant already paid the plaintiff.

Offsets can also be used in other contexts that don't involve money. For example, a pollution reduction in one area can offset pollution generation in another area. There is no requirement that an offset be of the same kind as the thing it is set against. In contractual relationships, the value of a duty to be performed can be used to offset a debt owed.

John owes Jane $50 for a loan she gave him. However, Jane also owes John $30 for a service he provided. The $30 can offset the $50, which means that John only owes Jane $20.

In a construction project, a developer may need to offset the loss of trees by planting new ones in a different area. This offsets the negative impact on the environment.

Overall, an offset is a way to balance out something else, whether it's money, pollution, or other actions in the physical world.