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CHAPTER IV RELATIONS OF PARTNERS TO THIRD PARTIES

Section 27: Liability of firm for misapplication by partners

The Indian Partnership Act, 1932

Where—

(a) a partner acting within his apparent authority receives money or property from a third party and misapplies it, or

(b) a firm in the course of its business receives money or property from a third party, and the money or property is misapplied by any of the partners while it is in the custody of the firm,

the firm is liable to make good the loss.

Questions on this section

1 question in 4 of our papers cite Section 27.

Practise questions on Partnership and Sale of Goods Acts