CITE

    15 USC Sec. 80a-46                                          01/05/2009

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER I - INVESTMENT COMPANIES

HEAD

    Sec. 80a-46. Validity of contracts

STATUTE

    (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.

SOURCE

    (Aug. 22, 1940, ch. 686, title I, Sec. 47, 54 Stat. 845; Pub. L. 96-
    477, title I, Sec. 104, Oct. 21, 1980, 94 Stat. 2277.)

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 nonenforcement 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.