Toronto Family Lawyer Ira Marcovitch was recently asked the following question:
My soon to be ex-wife proposed an agreement between us concerning business, property, child access etc. She sent me a draft via email for negotiation purposes and I agreed for the most part, and sent along the changes I wanted. She then went to her lawyer and had an agreement drawn up, with the changes I wanted omitted of course. She now says my acceptance via email is binding, without my signature! Please tell me this is not true.
Domestic contracts of any type (marriage contract, cohabitation agreements and separation agreements) are subject to the same rules about the process that must be adhered to, to have a valid contract, and the subject matter that the contracts are legally allowed to cover. While the question as to what subject matter a contract can cover is best left to another day, your question raises important points about executing domestic contracts.
Do I Need One at All?
A domestic contract is, in my view, the most time-efficient, cost-effective and civil means of addressing the issues arising from a breakdown in a relationship. It is the preferred way to bring predictability, certainty and finality into a situation that, most likely, has been lacking those for some time. The only other means to resolve family law issues is by going to court, which can cost tens of thousands of dollars and take years to resolve. If there is even a remote chance that spouses, with the assistance of competent counsel, can resolve matters without going to court, it is always preferable to work towards a domestic contract.
Can't My Spouse and I Just Write Up an Agreement or Use One We Find on a Website Like Law Depot?
Spouses are free to write a domestic contract in any form- they can even use a quill and parchment to do so. As long as it says "Separation Agreement" and is signed and witnessed by both parties, it is technically a valid contract. However, the difference between a valid contract and a contract that will be enforced by a court is stark and, in reality, it is the latter one that matters.
I have noticed an increase in the number of people approaching me regarding contracts they plan to make or have made on lawdepot.ca or other contract generators. Every one of these contracts has had provisions or lack of provisions that I (and a number of lawyers consulted) would never consider using. For instance, the provision for waiver of spousal support in a lawdepot contract is six lines long. Every spousal support waiver clause I have seen drafted by competent counsel has been upwards of a page and a half. Lawdepot agreements do not contain any of the standard references to the governing statutes, which is quite important. These are basic facets of drafting an enforceable agreement – It is clear that a practicing Ontario family lawyer did not write the lawdepot template.
If you need an agreement drafted, retain competent counsel to do so. Investing a bit at the outset in a solid agreement may save you tens of thousands down the road if the agreement is ever challenged. Think of it as an insurance policy against a future disaster – you will want to be well protected.
So How Is A Valid, Enforceable Agreement Concluded?
For a domestic contract to be valid and enforceable, it must first comply with the general law of contract. This means:
- Both parties must agree as to the subject matter of the contract;
- The contract must be in writing;
- The contract must be signed and witnessed;
- The contract must not contain any illegal bargains or promises
- The contract must be made without undue influence or duress.
In addition to these terms, s.56(4) of the Family Law Act lays out additional grounds on which a judge can set aside a domestic contract, such as if one party did not make full financial disclosure or if a party did not understand the nature or consequences of the agreement.
To ensure that there has been proper financial disclosure, you need to speak to a lawyer. Only a lawyer will be able to accurately tell you what assets need to be disclosed and what is the best way to ensure that the financial information you provide is sufficient. Sufficiency of financial disclosure is a common reason why agreements are set aside, years after they are concluded.
Most judges feel that for a party to understand the nature and consequences of an agreement, a layperson needs to hire a lawyer. It is not simply enough that they understand the meaning of the words and have a simple appreciation of the consequences. The case law is clear that the person must understand all the legal repercussions of their agreement, in a variety of circumstances.
Once represented parties agree to the terms of the agreement, and each has made full disclosure of their debts and liabilities, they are in a position to execute the contract. At this stage, each party will meet with their lawyer who will explain the nature and consequences of the contract through a process known as Independent Legal Advice. Once ILA has been given, a party will sign the agreement and the lawyer will attest that they have explained the nature and consequences of the agreement to the party. Once all interested parties have signed off, there is a valid and enforceable agreement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
