Where would i put a home-made exception class in rails?

The source file should go into the lib/ directory. That directory is automatically added to $LOAD_PATH by the Rails initialization process. You can "require" the file in several ways:

1. Use a require statement at the point of need.

2. Add a require statement to config/environment.rb

3. Take advantage of rails' magic auto-loading gizmo that will automatically load some_class.rb if you reference SomeClass and it's not already defined.

See also:

http://toolmantim.com/article/2006/12/27/environments_and_the_rails_initialisation_process