Tips to avoid havin an Invalid Domestic Contract (e.g. Prenuptial Agreement)
Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice, contact me (Michael Carabash) or David Mayzel.
Tips to avoid having an invalid and unenforceable Domestic Contract
Based on the jurisprudence, here are some tips to avoid having your Cohabitation Agreement rendered invalid and unenforceable by a Court:
Provide Adequate Disclosure
Adequate disclosure depends on the circumstances. Clearly, the list of assets, liabilities, income, etc. listed in Schedule “A” is a great start. But what about providing values? If it’s possible to put down approximate values of the most substantial items (e.g. assets, liabilities, etc.), then that would be a good idea. Sometimes, the person making disclosure can only guess – perhaps based on their knowledge.
Negotiate the Agreement
There will always be some issues that have to be negotiated, regardless of how significant or trivial they may appear to some people. The fact of the matter is that evidence of negotiation (i.e. that a party reviewed and put forward their own position – and perhaps even compromised to get a result) strengthens the view that the Agreement is valid and enforceable. Negotiating also means giving enough time for the parties to review and revise the Agreement; rushing things before the period of cohabitation begins could be disastrous!
Get Independent Legal Advice
Independent legal advice is NOT a formal requirement under the Family Law Act (or under the common law) to have a valid and enforceable Domestic Contract. That said, its presence helps to eliminate (except in the most exceptional circumstances) the ability for one party to have a court set aside the Domestic Contract on the basis that it did not understand “the nature or consequences of the” Domestic Contract or to set it aside “otherwise in accordance with the law of contract”. Basically, having an independent lawyer gives the impression that the lawyer’s knowledge and understanding is transferred to the party (because of the solicitor-client relationship and because it makes common sense). If it didn’t mean that, then the idea of having independent legal advice would be meaningless. One other thing: it is best not to have a party or their lawyer recommend a lawyer for the purpose of obtaining independent legal advice. There are lots of lawyers out there who can review the Agreement, advise the other party, and render a certificate of independent legal advice; leave it to the other party to do this for themselves. Things can look bad for you if you arrange to do it for them!
The final agreement should reflect the negotiated agreement between the parties. Clear and simple language should be used. This will prevent the other side from saying that they didn’t understand the terms of the agreement. It will also help prevent a court from using its own interpretation to fix things. Remember: mistakes will not be looked upon favourably – particularly against the party who drafted the final Agreement!