By Jeff Li
Disclaimer: The information contained in this article is general in nature and does not constitute legal advice. You should contact Jeff Li or a family lawyer if you are concerned about your family law issues.
When a couple get married or live together, a set of rights with respect to support and property are established, or may be established by law. We have discussed in previous blogs specific rules with respect to the matrimonial home and division of family property. If couples do not like them, are they allowed to set their own rules? The good news is, yes. Couples may decide how they should regulate their domestic relationships by making agreements, including marriage (pre-nuptial) contracts, cohabitation agreements and separation agreements.
The above three types of domestic contracts are recognized by Ontario’s Family Law Act. Marriage contracts can be entered into before or after marriage, but before marriage breakdown. If the contract is made before marriage, it is often called a prenuptial agreement. Cohabitation agreements are usually made by unmarried couples, and can be signed before or during their cohabitation. If the couple gets married later, the cohabitation agreement can become a marriage contract. Separation agreements are by far the most common domestic contract. They may deal with all rights and obligations arising from the relationship and its breakdown.
Several points should be borne in mind in making domestic contracts. First, while couples may wish to stipulate all their “deals” in the contract, not all of them may be legally enforceable. For example, cohabitation agreements may deal with all financial aspects of the cohabitating couple’s relationship, including its termination, but not custody or access issues. For marriage contracts, most restrictions on a spouse’s right to the matrimonial home, such as the right of possession, are unenforceable. While support obligations and the right to direct the education and moral training of children may be dealt with by marriage contracts, custody and access issues are not.
Another issue of domestic contracts relates to the formal validity. All domestic contracts must be put in writing, signed and witnessed. Normally parties must sign the contract they made in front of two witnesses, who must also sign in order to have the contract validated in form.
However, oftentimes a domestic contract valid only in form is not good enough. While parties may not pay much attention to this when they are making and signing the contract, legal challenges do arise when a party wants to enforce it. Many of the defects may render a domestic contract void or unenforceable. For example, had the parties fully disclosed their financials in preparing the contract? Was the contract signed voluntarily by the parties? Did the parties understand the terms and effects of the contract when they signed? Was the contract fair and not “unconscionable”?
To avoid this awkward situation, it is recommended that parties only sign a domestic contract after obtaining independent legal advice (ILA) from a lawyer. A lawyer will advise a client on whether a client should sign the contract by ensuring the client understands it and signs it freely and voluntarily. Apart from the factors listed above, whether a party is under duress and/or undue influence in making the contract is another element that needs to be assessed. Often, a lawyer may give advice on whether some terms of the contract may be found unconscionable and therefore unenforceable.
If signing of the domestic contract is advisable, the lawyer will usually sign an ILA certificate and append it to the end of the contract, indicating that the client has received ILA. A domestic contract with appropriate ILA certificates will not be easily struck down by the court. If you want your domestic contract to have a long lasting effect and be able to withstand the court’s scrutiny, it is important that you ask a family law lawyer for ILA.
Copyright: Jeff Jiehui Li
Related blogs:
Special “Properties” of the Matrimonial Home
Dividing Family Property in Ontario