Drafting Errors in Domestic Contracts – Is it Enforceable?

September 28, 2017

By: Gabriel Leung and Jeff J. Li

Disclaimer: The information contained in this article is general in nature and does not constitute legal advice. You should contact family law lawyer Jeff Jiehui Li if you are concerned about your family law issues.

While many couples who separate continue to live separately from one another, occasionally, couples get back together and reconcile. A marriage contract can be useful to help reconciling couples in these situations. However, if there is a drafting error in your agreement, it may lead to significant problems and serious consequences. If this happens, is the marriage contract still enforceable?

In the case of Stevens v Stevens, the husband and wife were married for 16 years. The wife realized that the husband was engaged in an affair. As a result, the couple separated and sought legal advice from different lawyers. In an attempt to reconcile, the couple created a marriage contract through negotiations. The contract stipulated that, both parties would each receive one-half of the equity in the matrimonial home should there be a breakdown of the marriage.

Afterwards, it became apparent the parties could not reconcile. However, an error in the agreement drafted by the wife’s counsel mistakenly allowed the husband to receive the entire value of the matrimonial home, rather than half as originally agreed upon. The husband and his counsel were fully aware of the mistake, but they did not inform the wife of the discrepancy.

In the Superior Court of Ontario, the trial judge held that the contract was not valid and thus set it aside. Upon review of the issues of mistake, unconscionability, and the wife’s mental capacity at the time, the Court held that the marriage contract was unenforceable. As a result, the property division and support obligations were determined under the Family Law Act and the Divorce Act. The Court also made an order with respect to costs as a result of the husband’s unreasonable conduct and the delays and complications resulting from his behaviour. (For a discussion about costs awards, see our blog “Cost orders and awards in family law litigation.”)

The husband appealed the decision to the Ontario Court of Appeal. Two major issues were addressed: 1) whether or not the husband was entitled to rectification of the contract, and 2) whether the trial judge placed undue reliance on the husband’s misconduct.

The Court of Appeal agreed with the trial decision and held that the contract should not be rectified and enforced, as the husband took a different position from the one argued in the lower court. The Court also rejected the husband’s argument that the trial judge placed undue weight on his misconduct. The Court agreed that the husband “refused to take steps to make the clarification and continued to insist that the agreement should be enforced as written”. The Court of Appeal found that there was no error in the trial judge’s findings and the appeal was dismissed

If there is a mistake in a domestic contract, it is important to take steps to prevent further complications and problems. If you want  advice about drafting or reviewing a domestic contract, contact the Law Office of Jeff Jiehui Li to schedule a consultation.

 

Related Articles

Marriage Contracts, Cohabitation Agreements and Separation Agreements

Family Law Services at Jeff Li’s Law Office

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