§ 4.03 Modern Enforceability: Generally Accepted Equitable Limits
| Jurisdiction | United States |
| Publication year | 2021 |
§ 4.03 Modern Enforceability: Generally Accepted Equitable Limits
In those states that enforce divorce agreements, rules for enforceability initially were judicially promulgated rather than statutorily enacted. An increasing number of states have enacted statutes that are quite detailed and explicit.12 Many statutes, however, are ambiguous. For example, some statutes provide that spouses may contract with one another, but limit this by stating that such contracts shall be governed by rules applicable to contracts between people who share a confidential relationship.13 No further clarification is provided. The divorce property division laws of other states exclude from divisible "marital property" property so excluded by a "valid" agreement. However, no rules for determining when an agreement is valid are set forth.14
Because state statutes frequently are not specific, in many states rules regarding the enforceability of divorce agreements have been promulgated by courts. These rules are not identical. Still, most courts have agreed upon certain equitable limits.
[1]—Written Agreement
Only written marital contracts are enforceable.15 However, an oral marital contract can be enforceable if its terms are partly or fully performed.16 Idaho has rejected this part performance exception.17 All material terms must be set forth.18
A Connecticut case considered whether both spouses must sign the agreement before marriage. The court held that the husband married his wife in reliance on the agreement that had been signed by the wife, and his signature was therefore not needed.19
Washington courts have enforced oral premarital agreements where the terms were clear and the parties adhered to the terms during the marriage.20
A Utah case has held that, if the parties had entered into an oral "student support contract," such an agreement would be enforceable if negotiated in good faith.21
A Wyoming case involved two people who moved to Wyoming shortly before they married. In their subsequent divorce, the wife claimed that, before they moved to Wyoming and married, the husband had promised her that, if she moved with him to Wyoming and married him, he would "take care of her for the rest of her life." The court did not enforce this alleged promise. The court stated that an oral premarital promise would be enforced only when it was necessary to prevent fraud.22
[2]—Fraud
A marital agreement procured by fraud is unenforceable.23 For example, if one spouse tells the other to "sign this, it's just a legal technicality" or otherwise materially misrepresents the nature of the agreement, it is unenforceable.24
If a party makes a material misrepresentation in connection with the negotiation of a premarital agreement, this could be grounds for invalidating it.25
A New York appellate court has affirmed a ruling that invalidated a premarital agreement because the woman's signature was fraudulently induced.26
In a Louisiana case, the husband and wife signed a prenuptial agreement. The husband argued that the agreement should be invalidated due to the wife's failure to disclose that she had undergone fertility treatments twice before the marriage without success. The court did not accept this argument.27
In a Georgia case, the wife alleged that her husband promised her that, if she signed the agreement, it would never be used against her and that he would tear up the agreement. When he did not tear up the agreement and attempted to enforce it, the Georgia Supreme Court affirmed the trial court ruling that the agreement should not be enforced due to fraud.28
In a New York case, the groom had his lawyer draft a premarital agreement that limited the bride's rights in the event of a divorce. She consulted a lawyer, who recommended substantial changes to the original draft. The groom and his lawyer allegedly agreed to make these changes. The bride and groom met on the day before the wedding and signed the agreement. The wife testified in their later divorce that the groom told her that all the changes suggested by her lawyer had been made to the revised draft. Apparently, the changes had not in fact been made to the agreement. The appellate court affirmed the ruling of the trial court that the agreement should not be enforced due to the husband's fraud.29
In a similar Texas case, the woman told her intended husband that she wanted her lawyer to review a draft of a proposed premarital agreement. She took the draft to her lawyer, who proposed numerous suggested changes. The intended husband told the bride that these suggested changes would be made. The intended husband did not provide the bride a copy of the revised agreement until the day of the wedding. The groom told the bride that the changes proposed by her lawyer had been made. She attempted to contact her lawyer, but could not speak to her lawyer. It turned out that the changes proposed by her lawyer had not been made. The appellate court affirmed the ruling that the agreement should not be enforced.30
The Uniform Premarital Agreement Act does not list fraud as a ground for invalidating an agreement.31 It is unclear whether fraud remains an additional implied ground for invalidation in UPAA states.
To the extent that fraud remains a ground for invalidating a premarital agreement, its scope remains unclear. For example, what if the richer spouse discourages the poorer one from retaining a lawyer? What if the richer spouse discourages the poorer spouse from retaining an experienced family lawyer and encourages the spouse to retain an inexperienced one?
[3]—Disclosure
If a marital contract contains a waiver or a limitation of property rights, if the parties divorce, such a provision will be enforced in many states only if the spouse intelligently agreed to the waiver or limitation. Many courts will only enforce such a waiver or limitation if the spouse received adequate information about the financial condition of the other spouse.32 A Pennsylvania court has stated that such a waiver of disclosure should be permitted if it is voluntarily made.33 Some courts will not require such disclosure if the party waived the right to receive it.34 Others would find this requirement satisfied if the parties in the agreement acknowledge that they have received adequate disclosure.35
Under the Uniform Premarital Agreement Act, a waiver of the right to receive disclosure of financial information must be signed before the premarital agreement is signed.36 If no waiver of the right to receive financial information is signed, in most UPAA states inadequate disclosure is a ground for challenging a premarital agreement only if it is also established that its terms are unconscionable at the time of signing.37 The Supreme Court of Delaware has held that, under the UPAA, if there was adequate disclosure of financial information in connection with the execution of a premarital agreement, the agreement should be enforced at divorce, even if it was unconscionable when signed.38 In some UPAA states, lack of awareness of the other's financial situation alone is a basis for challenging a premarital agreement.39
In a New Hampshire case, a man presented a premarital agreement to a woman at a time when the parties had not yet selected a wedding date. The man provided no financial information. When the woman later challenged the agreement based on this absence of financial information, the New Hampshire Supreme Court held that she had a duty to investigate the man's finances. The court emphasized that there was no time pressure, and that there was no inequality in bargaining power.40
It is generally accepted that, absent a waiver of a right to disclosure, the party who wants to establish the agreement is enforceable has the duty to establish that adequate disclosure was provided.41 Courts have disagreed about what constitutes adequate disclosure. One way to satisfy this obligation is for the parties "to provide the other with a general approximation of their income, assets and liabilities, and that a written schedule [be] appended to the agreement itself, although not absolutely necessary, is the most effective method of satisfying the [disclosure] obligation."42
The Connecticut Supreme Court has suggested that the amount of disclosure required in a given state might be impacted by whether prospective spouses are considered to be in a confidential relationship.43
The Montana Supreme Court has stated that a requirement that "fair and reasonable" disclosure be provided is a less stringent standard than a duty to provide "full and fair" disclosure.44
It has sometimes been considered adequate when the spouse who is waiving marital rights had very general knowledge of the financial situation of the other spouse,45 particularly if the waiving spouse is sophisticated.46 A number of courts agree that the crux of the analysis should be whether the marrying party had adequate information about the other party's finances to make a reasonable choice about whether to sign the agreement.47 A number of courts have considered it relevant if the spouse being asked to waive rights already was familiar with the other party's financial situation when the agreement was signed. If he or she already had adequate knowledge of the other's finances, disclosure would not be needed.48 To such courts it might be relevant whether the parties lived together before marriage, so each party thereby could have become generally familiar with the other's financial situation.49 Other courts have required more detailed disclosure of financial information.50 This is particularly true if the spouse waiving rights is unsophisticated.51 If the agreement contains disclosure, the waiving spouse cannot later avoid the agreement by claiming he or she did not read it.52
In a Mississippi case, a court held that the bride had adequate knowledge of her groom's financial situation where, although no financial disclosure was made in connection with the...
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