Section 55 — Canada Business Corporations Act: Notice of defect

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 in it by reference to another instrument or act, 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, even though the security expressly states that a person accepting it admits the notice. A security is valid in the hands of a purchaser for value without notice of any defect going to its validity. Subject to section 57, the fact that a security is not genuine is a complete defence even against a purchaser for value without notice. 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.