Multiple choice

Clayton's case is referred commonly to the

  1. Right of set off

  2. Right of lien

  3. Right of appropriation

  4. None of the above

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Clayton's Case (1816) established the rule of appropriation in banking - when a customer has multiple debts and makes a payment without specifying which debt it applies to, the bank applies it to the earliest debt chronologically (first in, first out). This principle is fundamental to appropriation of payments.