Hi, I have a customer that has some old unpaid invoices and when he makes recent payments he states the recent invoice he is paying. But I am allocating his payment to old invoices. I seem to recall there was a legal case that gave me the right to pay off the old invoices first. Can you point me to this case as I would like to show to my customer. Someone on the QF forum mentioned it several years ago but I cannot find it, thanks
You are referring to “the rule in Clayton’s Case” which dates back to 1816.
I am not a solicitor or accountant but IIRC if the payment is stated to apply to a specific invoice than that takes precidence.
Thanks for that but does that mean there is some other law that allows the customer to specify the invoice they are paying?
This is case law not statute law. My NON PROFESSIONAL understanding is that Clayton’s Case is the default in the absence of any other arrangement not an absolute rule.
ok, thats interesting. I have no other arrangement with customers on this so my view is that Clayton’s Case prevails. If i am challenged then customer would need to find case/statute that was more “convincing”
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