15 U.S.C. § 80a–46 — Validity of contracts
submitted 86 years ago by ch. 686 to r/title-15-COMMERCE-AND-TRADE · 237 words · no verdicts yet
A contract clause that makes someone waive this law's protections is void. A contract that violates this law usually can't be enforced, and need not be unwound, unless a court finds that's the fairer result. A contract's lawful parts can still be separated out and enforced.
(a) Waiver of compliance as void. Any condition or clause binding someone to waive compliance with this law, or with an SEC rule, regulation, or order, is void.
(b) Equitable results; rescission; severance. (1) A contract made, or performed, in violation of this law or its rules or orders, can't be enforced by either party — or by someone who got a right under it while knowing about the violation — unless a court finds enforcement would produce a more equitable result than non-enforcement, and wouldn't conflict with this law's purposes. (2) If such a contract has already been carried out, a court can't deny rescission unless it finds denying it would be more equitable than granting it, and wouldn't conflict with this law's purposes. (3) This subsection doesn't apply (A) to the lawful part of a contract, to the extent it can be separated from the unlawful part, or (B) to block a claim against someone for unjust enrichment.
Any condition, stipulation, or provision binding any person to waive compliance with any provision of this subchapter or with any rule, regulation, or order thereunder shall be void.
A contract that is made, or whose performance involves, a violation of this subchapter, or of any rule, regulation, or order thereunder, is unenforceable by either party (or by a nonparty to the contract who acquired a right under the contract with knowledge of the facts by reason of which the making or performance violated or would violate any provision of this subchapter or of any rule, regulation, or order thereunder) unless a court finds that under the circumstances enforcement would produce a more equitable result than nonenforcement and would not be inconsistent with the purposes of this subchapter.
To the extent that a contract described in paragraph (1) has been performed, a court may not deny rescission at the instance of any party unless such court finds that under the circumstances the denial of rescission would produce a more equitable result than its grant and would not be inconsistent with the purposes of this subchapter.
This subsection shall not apply (A) to the lawful portion of a contract to the extent that it may be severed from the unlawful portion of the contract, or (B) to preclude recovery against any person for unjust enrichment.
Source credit: (Aug. 22, 1940, ch. 686, title I, § 47, 54 Stat. 845; Pub. L. 96–477, title I, § 104, Oct. 21, 1980, 94 Stat. 2277.)
- 1940Enacted · Act of Aug. 22, 1940, ch. 686 · 54 Stat. 845
- 1980Amended · Pub. L. 96-477 · 94 Stat. 2277
A history note hasn’t been published yet. The record shows enactment by ch. 686 on 1940-08-22.
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