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U.S. Code as of:
01/19/04
Section 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.
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