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Companies Act 1993

Directors and their powers and duties - Transactions involving self-interest

142: Effect on third parties

You could also call this:

“How cancellation of a company's transaction affects innocent buyers”

If a transaction is cancelled under section 141, it won’t affect you if you bought property from someone other than the company. This is true as long as you paid a fair price for it and didn’t know about the cancelled transaction when you bought it. In other words, if you bought something in good faith and for a reasonable amount, you get to keep it even if the original sale was cancelled.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320677.

Topics:
Business > Industry rules
Business > Fair trading
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141: Avoidance of transactions, or

“Cancelling transactions involving company directors”

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143: Application of sections 140 and 141 in certain cases, or

“When sections 140 and 141 don't apply to directors' payments or protections”

Part 8 Directors and their powers and duties
Transactions involving self-interest

142Effect on third parties

  1. The avoidance of a transaction under section 141 does not affect the title or interest of a person in or to property which that person has acquired if the property was acquired—

  2. from a person other than the company; and
    1. for valuable consideration; and
      1. without knowledge of the circumstances of the transaction under which the person referred to in paragraph (a) acquired the property from the company.