diff --git a/lib/xeroizer/record/base.rb b/lib/xeroizer/record/base.rb
index a0534a5fb..d470a6499 100644
--- a/lib/xeroizer/record/base.rb
+++ b/lib/xeroizer/record/base.rb
@@ -105,15 +105,20 @@ def download_complete_record!
         end
 
         def save
-          save!
-          true
+          saves_successfully
         rescue XeroizerError => e
           log "[ERROR SAVING] (#{__FILE__}:#{__LINE__}) - #{e.message}"
           false
         end
 
         def save!
-          raise RecordInvalid unless valid?
+          raise RecordInvalid unless saves_successfully
+        end
+
+        private
+
+        def saves_successfully
+          return false unless valid?
           if new_record?
             create
           else
@@ -121,8 +126,15 @@ def save!
           end
 
           saved!
+        rescue ApiException => e
+          e.validation_errors.each do |error|
+            errors << [:base, error]
+          end
+          false
         end
 
+        public
+
         def saved!
           @complete_record_downloaded = true
           parent.mark_clean(self)
diff --git a/test/unit/models/tax_rate_test.rb b/test/unit/models/tax_rate_test.rb
index 70f714480..94a5bc5e4 100644
--- a/test/unit/models/tax_rate_test.rb
+++ b/test/unit/models/tax_rate_test.rb
@@ -1,5 +1,4 @@
 require 'unit_test_helper'
-require 'mocha/test_unit'
 
 class TaxRateTest < Test::Unit::TestCase
   include TestHelper
diff --git a/test/unit/record/base_test.rb b/test/unit/record/base_test.rb
index f2cdcd111..e29a2e5f7 100644
--- a/test/unit/record/base_test.rb
+++ b/test/unit/record/base_test.rb
@@ -132,9 +132,14 @@ class Xeroizer::Record::ExampleRecordClassModel < Xeroizer::Record::BaseModel; e
       end
     end
 
-    context 'api error received' do
+    context 'ApiException received' do
       setup do
         response = get_file_as_string('api_exception.xml')
+
+        # XeroGenericApplication API Exceptions *claim* to be UTF-16 encoded, but are not
+        # @see http_response.rb Xeroizer::XmlErrorResponse#raise_bad_request!
+        response.gsub! '<?xml version="1.0" encoding="utf-16"?>', ''
+
         doc = Nokogiri::XML(response)
         exception = Xeroizer::ApiException.new(doc.root.xpath("Type").text,
                                                doc.root.xpath("Message").text,
@@ -142,7 +147,6 @@ class Xeroizer::Record::ExampleRecordClassModel < Xeroizer::Record::BaseModel; e
                                                doc,
                                                '<FakeRequest />')
 
-        @contact.stubs(:valid?).returns(true)
         @contact.stubs(:create).raises(exception)
         @contact.stubs(:update).raises(exception)
       end
@@ -156,7 +160,7 @@ class Xeroizer::Record::ExampleRecordClassModel < Xeroizer::Record::BaseModel; e
 
       must 'raise an exception updating records with #save!' do
         @contact.stubs(:new_record?).returns(false)
-        assert_raise(Xeroizer::ApiException) do
+        assert_raise(Xeroizer::XeroizerError) do
           @contact.save!
         end
       end
@@ -170,6 +174,20 @@ class Xeroizer::Record::ExampleRecordClassModel < Xeroizer::Record::BaseModel; e
         @contact.stubs(:new_record?).returns(false)
         assert_equal(false, @contact.save)
       end
+
+      must 'set errors creating records with #save' do
+        @contact.stubs(:new_record?).returns(true)
+        @contact.save
+        assert_equal([[:base, "Users Organisation is not subscribed to currency NZD"]], @contact.errors)
+      end
+
+      must 'set errors updating records with #save!' do
+        @contact.stubs(:new_record?).returns(false)
+        assert_raise(Xeroizer::XeroizerError) do
+          @contact.save!
+        end
+        assert_equal([[:base, "Users Organisation is not subscribed to currency NZD"]], @contact.errors)
+      end
     end
   end
 end
diff --git a/test/unit_test_helper.rb b/test/unit_test_helper.rb
index 5b4309857..78e9a52d9 100644
--- a/test/unit_test_helper.rb
+++ b/test/unit_test_helper.rb
@@ -1,5 +1,6 @@
 require 'test_helper'
 require 'webmock'
+require 'mocha/test_unit'
 
 include WebMock::API
 WebMock.disable_net_connect!(allow_localhost: true)