A marriage contract or prenuptial agreement—which may be called an ante nuptial agreement, a premarital agreement, or simply a “prenup” or “prenupt”—is a formal contract between two people. Under the provisions of Ontario’s Family Law Act, this domestic contract is one that is entered into by two people who are either married to each other or who intend to marry each other.
A marriage (prenuptial) agreement is always a good idea
A written, witnessed and signed prenuptial agreement can, in advance, deal with the terms of a future separation or divorce. Because such agreements are negotiated at a time when future spouses have a positive outlook, these agreements are more likely to represent a fair, and appropriately structured, unwinding of each person’s affairs in the event the marriage later deteriorates.
The content is determined by law
The content of a prenuptial agreement often includes provisions for the division of property, spousal support and conditions of guardianship for any children. Further, it may call for the forfeiture of assets as a result of divorce on specific grounds, such as adultery.
The Family Law Act sets out the criteria that must be met for a prenuptial agreement to be considered legally valid. Specifically, the law states the following:
- the prenuptial agreement must be in writing, signed and witnessed;
- it must be based on complete disclosure of both partners’ respective assets, debts and other liabilities;
- each party must have had independent legal representation during the development of the agreement;
- there must be “equal bargaining power” between the parties. This means there can be no fraud, undue influence, duress or unconscionable circumstances between them;
- the agreement must be clear and accurate; and
- the agreement must cover only those topics and matters that are specifically permitted under the Act.
If these requirements are met, it can generally be assumed that the prenuptial agreement will be valid and enforceable.
Courts usually uphold agreements that were freely negotiated and agreed to by both parties—no matter how unfair they may seem when circumstances later change.
(In fact, the Supreme Court of Canada has stated that while courts always retain the right to set aside or overrule an agreement that is “unconscionable,” they should otherwise be reluctant to interfere with an agreement that the spouses have freely and willingly entered into.)
It’s important to note the Family Law Act does not allow spouses to enter into an agreement relating to the custody or access to the children. These matters are governed by separate and specific laws that focus on the best interests of the children.
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