This is a question that family lawyers get asked by clients all the time. The answer begins with an acknowledgment that under Ontario law, domestic agreements between couples are no different from any other contract.
This means there are certain elements and prerequisites in place that must be present before the agreement is considered valid; conversely there are only a narrow set of circumstances that make an otherwise-valid agreement likely to be set aside by a court.
Here are the essential points to know:
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- As a general rule, courts will tend to uphold a valid domestic contract, and are usually reluctant to set them aside. Public policy dictates that couples should be encouraged to settle their own affairs.
- Still, the Family Law Act specifically allows a court to set aside an agreement in defined circumstances, namely:
- when there has been a failure to disclose certain financial information,
- if one party did not understand its nature or consequences, or
- the agreement is invalid under the usual contract law principles.
- It is up to the spouse who objects to the domestic contract, to show that one of these factors is present. Then the court still has to decide whether it should declare the agreement invalid. The court retains discretion in this regard – it is not automatic.
- Under the third factor, basic contract law dictates that courts can set aside an agreement in some cases, depending on the facts. However, this is usually limited to those scenarios where one spouses is unable to protect him or herself, has been preyed upon by the other, or has been deprived of the ability to understand the agreement’s circumstances. In short: courts look for unconscionability, usually due to spouses having unequal positions.
- Courts will not protect spouses who have simply failed to protect themselves, however. The fact that a spouse has not done due diligence, has failed to ask questions, or has been careless in ensuring that he or she is not taken advantage of by the other spouse, will not justify a court’s intervention.
- The fact that one spouse did not obtain independent legal advice is not conclusive – it is only one of several factors.
Do you have a separation agreement or other domestic contract that you want to get out of? Contact us for a consultation.