§ 78cc. — Validity of contracts.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC78cc]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2B--SECURITIES EXCHANGES
Sec. 78cc. Validity of contracts
(a) Waiver provisions
Any condition, stipulation, or provision binding any person to waive
compliance with any provision of this chapter or of any rule or
regulation thereunder, or of any rule of an exchange required thereby
shall be void.
(b) Contract provisions in violation of chapter
Every contract made in violation of any provision of this chapter or
of any rule or regulation thereunder, and every contract (including any
contract for listing a security on an exchange) heretofore or hereafter
made, the performance of which involves the violation of, or the
continuance of any relationship or practice in violation of, any
provision of this chapter or any rule or regulation thereunder, shall be
void (1) as regards the rights of any person who, in violation of any
such provision, rule, or regulation, shall have made or engaged in the
performance of any such contract, and (2) as regards the rights of any
person who, not being a party to such contract, shall have acquired any
right thereunder with actual knowledge of the facts by reason of which
the making or performance of such contract was in violation of any such
provision, rule, or regulation: Provided, (A) That no contract shall be
void by reason of this subsection because of any violation of any rule
or regulation prescribed pursuant to paragraph (3) of subsection (c) of
section 78o of this title, and (B) that no contract shall be deemed to
be void by reason of this subsection in any action maintained in
reliance upon this subsection, by any person to or for whom any broker
or dealer sells, or from or for whom any broker or dealer purchases, a
security in violation of any rule or regulation prescribed pursuant to
paragraph (1) or (2) of subsection (c) of section 78o of this title,
unless such action is brought within one year after the discovery that
such sale or purchase involves such violation and within three years
after such violation. The Commission may, in a rule or regulation
prescribed pursuant to such paragraph (2) of such section 78o(c) of this
title, designate such rule or regulation, or portion thereof, as a rule
or regulation, or portion thereof, a contract in violation of which
shall not be void by reason of this subsection.
(c) Validity of loans, extensions of credit, and creation of liens;
actual knowledge of violation
Nothing in this chapter shall be construed (1) to affect the
validity of any loan or extension of credit (or any extension or renewal
thereof) made or of any lien created prior or subsequent to the
enactment of this chapter, unless at the time of the making of such loan
or extension of credit (or extension or renewal thereof) or the creating
of such lien, the person making such loan or extension of credit (or
extension or renewal thereof) or acquiring such lien shall have actual
knowledge of facts by reason of which the making of such loan or
extension of credit (or extension or renewal thereof) or the acquisition
of such lien is a violation of the provisions of this chapter or any
rule or regulation thereunder, or (2) to afford a defense to the
collection of any debt or obligation or the enforcement of any lien by
any person who shall have acquired such debt, obligation, or lien in
good faith for value and without actual knowledge of the violation of
any provision of this chapter or any rule or regulation thereunder
affecting the legality of such debt, obligation, or lien.
(June 6, 1934, ch. 404, title I, Sec. 29, 48 Stat. 903; June 25, 1938,
ch. 677, Sec. 3, 52 Stat. 1076; Pub. L. 101-429, title V, Sec. 507, Oct.
15, 1990, 104 Stat. 956.)
References in Text
This chapter, referred to in subsecs. (a), (b), and (c), was in the
original ``this title''. See References in Text note set out under
section 78a of this title.
Amendments
1990--Subsec. (b). Pub. L. 101-429 substituted in cl. (A)
``paragraph (3)'' for ``paragraph (2) or (3)'' and in cl. (B)
``paragraph (1) or (2)'' for ``paragraph (1)'', and inserted at end
``The Commission may, in a rule or regulation prescribed pursuant to
such paragraph (2) of such section 78o(c) of this title, designate such
rule or regulation, or portion thereof, as a rule or regulation, or
portion thereof, a contract in violation of which shall not be void by
reason of this subsection.''
1938--Subsec. (b). Act June 25, 1938, inserted proviso.
Effective Date of 1990 Amendment
Amendment by Pub. L. 101-429 effective Oct. 15, 1990, with
provisions relating to civil penalties and accounting and disgorgement,
see section 1(c)(1), (2) of Pub. L. 101-429, set out in a note under
section 77g of this title.
Section Referred to in Other Sections
This section is referred to in section 78o-4 of this title.
