15 U.S.C. § 80a–46: Validity of contracts

Summary

Any contract term that makes someone give up the right to follow these rules is void. A contract made or carried out in violation of these rules cannot be enforced by anyone who is a party, or by someone who got rights under the contract and knew about the violation, unless a court finds that enforcing it would be fairer and would not conflict with the goals of the rules. If part of the contract was already done, a court can usually cancel it unless canceling would be less fair. Lawful parts that can be separated stay valid, and people can still recover for unjust enrichment.

Title 15, §80a–46

Commerce and Trade, Source: USLM XML via OLRC

(a)Waiver of compliance as void

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)Equitable results; rescission; severance

(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.

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.

§80a–46 Validity of Contracts

Summary

Title 15, §80a–46

Notes & Related Subsidiaries

Editorial Notes

Amendments

Enforcement

Enforcement

Enforcement

Citations & Metadata