Canada Business Corporations Act

Marginal note:Notice of defect

• 55 (1) Even against a purchaser for value without notice of a defect going to the validity of a security, the terms of the security include those stated on the security and those incorporated therein by reference to another instrument, statute, rule, regulation or order to the extent that the terms so incorporated do not conflict with the stated terms, but such a reference is not of itself notice to a purchaser for value of a defect going to the validity of the security, notwithstanding that the security expressly states that a person accepting it admits such notice.

• Marginal note:Purchaser for value

  (2) A security is valid in the hands of a purchaser for value without notice of any defect going to its validity.

• Marginal note:Lack of genuineness

  (3) Subject to section 57, the fact that a security is not genuine is a complete defence even against a purchaser for value without notice.

• Marginal note:Ineffective defences

  (4) All other defences of an issuer, including non-delivery and conditional delivery of a security, are ineffective against a purchaser for value without notice of the particular defence.