Challenging a separation agreement
You’ve signed a separation agreement, but now you regret it. Is it too late? Can you challenge a separation agreement? It depends. In most cases, a separation agreement is a legally binding and enforceable domestic contract. However, simply drafting a document and calling it a separation agreement does not automatically make it legally binding and enforceable.
Unfair circumstances surrounding negotiations, lack of financial disclosure, or the vulnerability of a party could result in a court overturning a separation agreement, partially or in its entirety.
We will explain this further to help you understand some situations where a separation agreement may be challenged.
A fair negotiation process
Family law contracts are not treated the same way as ordinary commercial contracts. Parties and lawyers are held to higher ethical standards and must ensure fairness in their negotiations.
Consider the following:
- Was the agreement prepared and signed in haste?
- Was there proper financial disclosure exchanged between the parties?
- Was a party under undue pressure or threats to sign the agreement?
- Was there a power imbalance during the negotiations?
- Did both parties have independent legal advice?
- Was one of the parties in a vulnerable state of mind when signing the agreement?
Full financial disclosure is essential in negotiating most separation agreements. For example, when dealing with financial matters, the parties have a right to ask for and obtain disclosure of the income, assets and debts of the other party. In such a situation if the other party hides, misleads or refuses to provide the relevant financial information, it could later be used as a reason to set aside a separation agreement.
Is a party protected if the other party does not ask for financial disclosure? Not necessarily. It really depends on how sophisticated the other party was and whether they truly understood the significance of not asking for financial disclosure. In other cases, a party may not even be aware of certain financial matters.
Therefore, to decrease the chances of a separation agreement being challenged in the future, it is imperative that parties fully disclose all information. This not only reduces the chances of a challenge, it can, in many cases, reduce the time and cost associated with negotiating a separation agreement.
Vulnerability of one party
The vulnerability of one of the parties can result in a separation agreement being set aside. For example, if one of the parties suffered emotional and psychological abuse in the relationship, then the court may later set aside the agreement on the basis that one of the parties was economically and emotionally vulnerable at the time the agreement was signed.
Independent legal advice
This is a common reason why separation agreements are overturned. The law is very clear on this. If a party does not truly understand their rights and obligations, and the implications of what they are agreeing to in a separation agreement, the court can overturn the separation agreement.
How do you prove that the other party understood everything properly? This is where independent legal advice comes in. A properly negotiated separation agreement will almost always mention that the parties had legal advice and understood their rights and obligations. If the separation agreement does not mention this, and there is no proof that a lawyer gave legal advice to a party, the separation agreement may be overturned by the court.
What is the lesson from all of this?
- Separation agreements can be challenged if the process is not followed properly.
- If you want to substantially reduce the chance of your separation agreement being overturned in the future, follow the process properly.
- If you have signed an agreement but feel that the process was not fair, you have options.
- If full financial disclosure was not provided, you were bullied into signing, or did not understand what you were agreeing to, you may have grounds to challenge the separation agreement.
- The situations and factors listed in this article are not the only ones that could lead a court to overturn a separation agreement. There are more situations and other scenarios in which the courts have overturned agreements.
- It is in your best interest to obtain legal advice from a lawyer when dealing with a separation agreement.