Is a Domestic Contract with My Spouse Binding?

Understanding Domestic Contracts: What You Need to Know

You may choose to enter into a domestic contract if you are getting married, beginning to live with a new partner, or separating from your spouse. They are contracts between spouses that are meant to either guide the parties regarding a future separation or resolve outstanding issues arising out of the parties ending their relationship or marriage.

Types of Domestic Contracts

• Marriage Contracts: Otherwise known as pre-nuptial agreements or pre-marital agreements, these contracts are normally entered into before or just after marriage for the purpose of setting your own rules regarding what happens if you were to eventually separate from your future spouse. It’s kind of like having seen a movie already and wanting to write your own ending.
• Cohabitation Agreements: A cohabitation agreement is like a marriage contract but between unmarried couples or common-law partners who are planning to or have recently moved in together and who also want to change the rules regarding what happens if they were to eventually separate.
• Separation Agreements: Separation agreements are for both common-law spouses and married spouses and resolve all legal issues arising out of the end of their relationship or marriage, such as child-related issues, support, and property division.

What Should I Think About When Making a Domestic Contract?

If you have decided you need a domestic contract of any kind, it is important to first set your goals for what you want in the contract. A lawyer can help you determine your goals, negotiate the terms of the contract, draft the document, answer any questions you may have, and understand the terms of your agreement.

As with any contract, it is also important to ensure you and your spouse have been fully transparent regarding financial disclosure so that you both enter into the contract with all the information you need.

Are Domestic Contracts Binding?

It is important that any domestic contract you enter into will be binding on you and your spouse so that you can rely on it when making major life decisions. When determining whether a contract is binding, the court will balance giving the parties the freedom to set their own terms while also ensuring the contract is fair and no party is unequally vulnerable when making the agreement.

In a recent Supreme Court of Canada case, Anderson v. Anderson 2023 SCC 13, the court reevaluated when domestic agreements are enforceable. In this case, the court clarified it would not be inclined to set aside the wishes of parties in a domestic contract unless:

• The circumstances of the agreement were negotiated and executed in a way that would discount the validity of the agreement. For example, if there is a power imbalance or any signs of oppression, pressure, or any vulnerabilities of one party, the court may find it “unconscionable” to enforce. Although, the court may not choose to set aside the whole agreement depending on the circumstances.
• There has been an unforeseeable change in circumstances. The court clarified that changes such as health, value of assets, and parental responsibilities are things that should be presumed as possible to change. Furthermore, the change in circumstances must impact the agreement so that it no longer reflects the original intentions that influenced the parties to make the agreement.

Legal Requirements and Advice

Though you are not legally required to seek advice from lawyers before you enter into a domestic agreement, it is important to understand what you are signing. Lawyers can aid in the negotiating and drafting of terms of a domestic agreement as well as ensure that you have a comprehensive understanding of all provisions. Additionally, a domestic agreement must be in writing, signed by each partner, dated, and signed by witnesses to be legally binding.

Finding a Lawyer to Help With a Domestic Contract

If you are considering writing a domestic agreement, look no further. Our team has the expertise and skill necessary to meet your needs. Please contact us to book a consultation.