Alisha Rahman, Kirit P. Mehta School of Law, NMIMS, Mumbai
ABSTRACT
This paper outlines the case of Devaynes v Noble and case law that evolved from it, the perception of Clayton’s Rule and its prevalence across the United Kingdom courts. The rule has been incorporated into the Indian Contract Act, 1872, with modifications and the actual rule in itself is treated as a presumption that can be displaced.
This paper also covers the migration away from Clayton’s rule, the recorded ambiguity and injustice that can come with the application of Clayton’s rule, the growing use of the Parri passu solution in contrast to Clayton’s, and the introduction of the North American Rolling Charge method into the commonwealth courts.
Keywords: Clayton’s rule, Devaynes v Noble, Parri Passu, Rolling Charge, Indian Contract Act, Banking, Debt
