Plain language law

New Zealand law explained for everyone

Partnership Law Act 2019

Relationship of partners to third persons and to each other - Relationship of partners to third persons

24: Misapplication of money or property received for or in custody of firm

You could also call this:

“Partners must handle other people's money and things carefully”

If you’re part of a group working together (called a firm), you need to be careful with other people’s money or things. Your firm can get in trouble if someone in the group does something wrong with this money or these things.

Here’s what can happen:

If one of the people in your group takes money or things from someone else while they’re working for the group, and then uses it in the wrong way, your whole group can get in trouble.

Also, if your group gets money or things from someone else as part of your work, and then anyone in your group uses it wrongly while your group is looking after it, your whole group can get in trouble.

It’s important to be honest and careful with other people’s money and things when you’re working in a group.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS206013.

Topics:
Business > Industry rules Money and consumer rights > Banking and loans
Previous

23: Liability of firm for partner’s wrongful acts or omissions, or

"Partners may be responsible for mistakes made by other partners in their business"

Next

25: Liability for wrongful acts or omissions is joint and several, or

"Partners can be held responsible together or alone for their business's wrongdoings"

Part 3 Relationship of partners to third persons and to each other
Relationship of partners to third persons

24Misapplication of money or property received for or in custody of firm

  1. A firm is liable for a loss if—

  2. a partner—
    1. receives the money or property of a third person while acting within the scope of the partner’s apparent authority; and
      1. misapplies the money or property; or
      2. the firm, in the course of its business, receives the money or property of a third person and the money or property is misapplied by 1 or more of the partners while it is in the custody of the firm.

        Compare