DOMESTIC CONTRACTS

What is a Domestic Contract?

Generally, a domestic contract is an agreement between parties concerning personal, family, property, and/or relationship matters.

What Types of Domestic Contracts Exist?

In Ontario, there are five recognized types of domestic contracts including:

1.   marriage contracts;
2.   separation agreements;
3.   cohabitation agreements;
4.   paternity agreements; and,
5.   family arbitration agreements.

What Is A Marriage Contract?

A marriage contract is an agreement that is created between married couples, also known as a “pre-nup” or prenuptial agreement. It outlines division of property, finances and debts if a separation were to occur or in the event of the death of a partner. Under Ontario laws, there is the right to share the value of the matrimonial home upon separation. However, in some circumstances, a marriage contract may include that only one partner will have the right to the value of the matrimonial home or the right to live in the matrimonial. The laws in Ontario generally allow for such arrangements to be agreed to in a marriage contract.

What Is A Separation Agreement?

A separation agreement is created to deal with the separation of a common law or married couple. It can outline a number of things such as division of property, decision-making responsibilities, parenting time for the child and financial support. A separation agreement is useful in cases of amicable separations to avoid the cost of court proceeding. It also allows both parties to have more control over the details of the agreement.

What Is A Cohabitation Agreement?

A cohabitation agreement is generally created prior to moving in with a partner or after you have moved in with a partner. It includes details regarding finances and division of property. It is created to protect common law couples’ individual assets if a separation were to occur.

What Is A Paternity Agreement?

A paternity agreement is created when a couple has a child or children, are not married and are separating or ending their relationship. The purpose of a Paternity Agreement is to address issues involving the child or children such as child support, custody and access and decision-making responsibilities of both parties. It allows for both parties to outline the terms for both parties in relation to the child or children without court intervention.

What Is A Family Arbitration Agreement?

A family arbitration agreement is the result of attending arbitration. Family arbitration is a process where spouses discuss important details like divorce, property etc. and then a neutral third-party arbitrator decides on the outcome. Family Arbitration is less formal than court proceedings and generally less expensive. You and your spouse must agree which issues the arbitrator will attend to prior to attending arbitration.

What are the Benefits of a Domestic Contract?

Domestic contracts allow parties to privately make arrangements concerning their personal, family, property, and/or relationship matters. They give individuals a sense of independence, control, and peace of mind about such matters. Additionally, domestic contracts are cost-efficient and can be drafted and agreed to without court intervention.

What are the Limitations of Domestic Contracts?

As with any contract, domestic contracts may be subject to judicial interpretation depending on the terms of the contract and the surrounding circumstances. Furthermore, if there is unequal bargaining power between the parties that executed the domestic contract, that contract may be found to be unconscionable and therefore not enforceable in a court of law.

Requirements For Domestic Contracts

A domestic contract must be done in writing and signed by both partners in front of a witness in order for the contract to be considered legally binding. If changes need to be made once the initial contract is signed, these changes must be made in writing and signed by both partners in front of a witness again.

How Are Domestic Contracts Enforced?

Domestic contracts can be filed with the court where they would then be enforced as a court order. Filing your domestic contract with the court does not mean the court will intervene. The court will only intervene with a domestic contract in the event of a dispute regarding the domestic contract.

Challenging Unfair Domestic Contracts

In order to challenge a portion or the entirety of a domestic contract, you must apply to the Courts to do so. However, the Courts do not like to interfere with properly executed domestic contracts.

Courts will allow challenges to be made to a domestic contract if you can show that:

1. Your partner was dishonest regarding their financial circumstances at the time of execution of the domestic contract;
2. You were coerced into singing the domestic contract;
3. The agreement is extremely unfair and only benefits one party.

It is important to note that when a domestic contract is challenged, the Courts decide whether a portion of the contract should be removed or if the whole agreement is null and void. In cases where the court rules a part of the contract or the entire agreement is unfair, you and your partner may create a new agreement or ask the Court to assist and address the issues.

Conclusion

Prior to signing a domestic contract, it is important to seek legal advice. A family law lawyer can assist with helping you understand the terms of the agreement and Ontario law, the type of domestic contract(s) recommended in the circumstances, and your family law rights.

If you are interested in learning more about domestic contracts and how they may benefit you, or if you are involved in a legal dispute concerning the terms or circumstances of an existing domestic contract, please call our firm CHAND & CO. at 416-583-2377 or email us at admin@chandlitigation.com. Our family law lawyers will assist you in whatever way we can with respect to your family law matter.

*DISCLAIMER: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this website are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information.*