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Title 15, Commerce and TradeRelease 119-73not60

§80a–46 Validity of Contracts

Title 15 › Chapter 2D— INVESTMENT COMPANIES AND ADVISERS › Subchapter I— INVESTMENT COMPANIES › § 80a–46

Last updated Apr 3, 2026|Official source

Summary

Any term that forces a person to give up following this law or its rules is void. A contract made or carried out in violation of this law or its rules cannot be enforced by anyone, including someone who got rights under the deal knowing it was illegal, unless a court decides enforcing it would be fairer and would not conflict with the law’s goals. If the contract was partly performed, a court may only refuse to cancel it if refusing is fairer and not inconsistent with the law. The lawful part of a contract can be kept if it can be separated, and people may still recover for unjust enrichment.

Full Legal Text

Title 15, §80a–46

Commerce and Trade, Source: USLM XML via OLRC

(a)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.
(b)(1)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.
(2)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.
(3)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.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1980—Subsec. (b). Pub. L. 96–477 provided that a contract whose terms violated this subchapter or any rule, regulation, or order thereunder would be unenforceable by either party or by a nonparty to the contract who acquired a right under such contract with knowledge of the facts by reason of which the making or performance of the contract would violate this subchapter, struck out provisions declaring such contracts void as regards the rights of the violators or nonparties to the contract with actual knowledge of its illegality, authorized the court to enforce such contracts where the court found that under the circumstances

Enforcement

would produce a more equitable result than non

Enforcement

and such

Enforcement

would not be inconsistent with the purposes of this subchapter, authorized the same two-part test to save from rescission any portions of such contracts which had been performed, and provided that subsec. (b) was not to apply to a lawful portion of a contract to the extent it could be severed from an unlawful portion of such contract, or to preclude recovery against any person for unjust enrichment.

Reference

Citations & Metadata

Citation

15 U.S.C. § 80a–46

Title 15, Commerce and Trade

Last Updated

Apr 3, 2026

Release point: 119-73not60