Clayton's case is referred commonly to the
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Right of set off
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Right of lien
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Right of appropriation
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None of the above
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.