State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_16 > GS_16-3

Article 2.

Contracts for"Futures."

§ 16‑3.  Certaincontracts as to "futures" void.

Every contract, whether inwriting or not, whereby any person shall agree to sell and deliver any cotton,Indian corn, wheat, rye, oats, tobacco, meal, lard, bacon, salt pork, saltfish, beef, cattle, sugar, coffee, stocks, bonds, and chooses in action, at aplace and at a time specified and agreed upon therein, to any other person,whether the person to whom such article is so agreed to be sold and deliveredshall be a party to such contract or not, when, in fact, and notwithstandingthe terms expressed of such contract, it is not intended by the parties theretothat the articles or things so agreed to be sold and delivered shall beactually delivered, or the value thereof paid, but it is intended andunderstood by them that money or other thing of value shall be paid to the oneparty by the other, or to a third party, the party to whom such payment ofmoney or other thing of value shall be made to depend, and the amount of suchmoney or other thing of value so to be paid to depend upon whether the marketprice or value of the article so agreed to be sold and delivered is greater orless at the time and place so specified than the price stipulated to be paidand received for the articles so to be sold and delivered, and every contractcommonly called "futures" as to the several articles and thingshereinbefore specified, or any of them, by whatever other name called, andevery contract as to the said several articles and things, or any of them,whereby the parties thereto contemplate and intend no real transaction as tothe article or thing agreed to be delivered, but only the payment of a sum ofmoney or other thing of value, such payment and the amount thereof and theperson to whom the same is to be paid to depend on whether or not the marketprice or value is greater or less than the price so agreed to be paid for thesaid article or thing at the time and place specified in such contract, shallbe utterly null and void; and no action shall be maintained in any court toenforce any such contract, whether the same was made in or out of the State, orpartly in and partly out of this State, and whether made by the parties theretoby themselves or by or through their agents, immediately or mediately; norshall any party to any such contract, or any agent of any such party, directlyor remotely connected with any such contract in any way whatever, have ormaintain any action or cause of action on account of any money or other thing ofvalue paid or advanced or hypothecated by him or them in connection with or onaccount of such contract and agency; nor shall the courts of this State haveany jurisdiction to entertain any suit or action brought upon a judgment basedupon any such contract. This section shall not be construed so as to apply toany person, firm or corporation, or his or their agents, engaged in thebusiness of manufacturing or wholesale merchandising in the purchase and/orsale of the necessary commodities required in the ordinary course of theirbusiness; nor shall this section be construed so as to apply to any contractwith respect to the purchase and/or sale for future delivery of any of thearticles or things mentioned and referred to in this section, where such purchaseand/or sale is made on any exchange on which any such article or things areregularly bought and sold, or contracts therefor regularly entered into, andthe rules and regulations of such exchange are such that either party to suchcontract may require delivery thereof: Provided, such contract is made inaccordance with such rules and regulations.

In addition, this Articleshall not apply to any person, firm, corporation, or other entity, either asprincipal or agent, or to any contract, that is excluded or exempted under theCommodity Exchange Act, as provided in section 16(e)(2) of the CommodityExchange Act, 7 U.S.C. § 16(e)(2), and, accordingly, each section of thisArticle shall be considered a "law that regulates or prohibits theoperation of bucket shops" within the meaning of section 16(e)(2) of theCommodity Exchange Act. (1889, c. 221, s. 1; 1905, c. 538, s. 7; Rev., s. 1689; 1909, c. 853,s. 1; C.S., s. 2144; 1931, c. 236, s. 1; 2001‑110, s. 1.)