A cohabitation agreement is a legal tool available to unmarried couples in Ontario who are living together or planning to do so. It allows them to outline their respective rights and obligations, including property division, financial support, and arrangements for their children’s education and moral upbringing.
The courts generally want to uphold these agreements when they are entered into earnestly and do so whenever they are able to. However, while these agreements can provide clarity and protection and are generally enforceable, they are not guaranteed to hold up in court.
Judges have the authority to void or alter a cohabitation agreement if it fails to meet certain legal standards, whether those relate specifically to cohabitation agreements or to broader principles of contract law. We will explore some of the main reasons why cohabitation agreements don’t hold up in court, and what you can do to protect yourself.
Reasons the Court Won’t Honour Your Cohabitation Agreement
Section 56 of the Ontario Family Law Act sets out the reasons domestic contracts, including a cohabitation agreement, can be set aside or disregarded.
Inaccurate or Insufficient Financial Disclosure
- If one of the parties fails to disclose to the other significant assets, debts, or other liabilities that were in existence when the domestic contract was made, the court can set aside the entire agreement or just a provision of it.
Lack of Understanding
- Both parties must fully understand their rights and the nature and consequences of the agreement. Comprehension and language differences are common reasons a party is deemed not to have fully understood the agreement they were signing.
Illegal Clauses
- The family law act prohibits cohabitation agreements from deciding on the right to decision-making responsibility or parenting time with respect to their children. Other clauses that would require either party to engage in illegal acts, or “moral” clauses like ones requiring chastity upon separation, are unenforceable.
Not Properly Executed
- For a cohabitation agreement to be legal, it needs to be signed by both parties and correctly witnessed.
Cohabitation agreements
Moving in together is a big step. Take it on solid ground.
A cohabitation agreement protects you both, whatever comes next.
Coercion, Duress or Fraud
- A cohabitation agreement needs to be entered into voluntarily by both parties for it to be valid. It must also not be entered into for fraudulent purposes, such as to conceal assets or debts from creditors.
Unconscionability
- If the contract is grossly unfair and a reasonable person would find enforcing that clause or agreement to be unthinkable, a judge can overturn a specific clause or void the entire contract, depending on the circumstances.
How to Avoid Having it Thrown Out in Court
The courts want to honour the sanctity of contracts and the true intentions of those who are subject to their terms. However, they are under an obligation to ensure justice is upheld, which means that they will void a cohabitation agreement if it is not up to the legal standards of Ontario.
A properly drafted agreement that both parties fully understand the legal impact of on their rights, signed in good faith with neither being pressured or otherwise coerced into signing, will be able to withstand court scrutiny. To ensure all these things happen, it is highly recommended that each party get independent legal advice (ILA).
This means each party has their own lawyer look over the agreement and flag anything they see that concerns them in terms of their clients’ rights and obligations. It is a requirement in other provinces, but not in Ontario at this time. ILA provides each party with the knowledge necessary to make an informed decision and can also provide evidence that the parties entered into the agreement willingly, that it is properly written, signed and witnessed, and that the disclosure of finances is sufficient.
To protect yourself, and your spouse, using lawyers to assist in the preparation and execution of the your agreement helps ensure that it not only reflects your true wishes, but is also properly executed. Book a quick consult with our team to see if Angrove Law can assist you in creating a legally sound and clear cohabitation agreement or prenup.
Do cohabitation agreements expire?
They can, but do not have to. One of the things that should be set out clearly in your cohabitation agreement is if and when it expires.
How do you dissolve a cohabitation agreement?
To cancel or void a cohabitation agreement without going through the courts, the parties will need to enter into a valid new agreement.
Can my common-law partner take my house in Ontario?
Unless your common-law spouse is on title for the property, they do not have an automatic interest in your house. However, a judge could find that they acquired a beneficial interest, and be entitled to compensation, based on your relationship and their contributions to the property.
