Georgia's Evolving View on the Enforceability of Prenuptial Agreements
| Publication year | 2007 |
| Pages | 0012 |
| Citation | Vol. 12 No. 5 Pg. 0012 |
GSB Vol. 12, No. 5, Pg. 12. Georgia's Evolving View on the Enforceability of Prenuptial Agreements
Volume 12, No. 5
February 2007
In the last several decades, prenuptial agreements have become an increasingly important and visible feature of marriage in American society.(fn1) Traditionally, courts would enforce prenuptial agreements only when they met heightened standards of procedural and substantive fairness.(fn2) In recent years, however, a minority of states have started to move away from marital public policy considerations and toward procedural and substantive standards accorded ordinary contracts.(fn3) This article examines the evolution of Georgia standards governing the enforceability of prenuptial agreements within broader national trends.
Issues of Procedural and Substantive Fairness of Prenuptial Agreements
Courts generally hold that a premarital agreement meets procedural fairness requirements if it was made voluntarily after full disclosure of all material facts bearing on the agreement (particularly each party's financial resources) .4
The substantive fairness inquiry focuses on whether an agreement is unconscionable.(fn5) The doctrine of unconscionability has generated significant debate in both the context of commercial and marital agreements. Indeed, even defining the term unconscionability has proven exceedingly difficult. As Professor Arthur Allen Leff commented in his landmark treatise, Unconscionability and the Code - The Emperor's New Clause, "[t]he word "unconscionable" ... describes the emotional state of the trier."(fn6) According to Leff, the determination of whether an agreement may be deemed unconscionable is "what may permissibly make the judges' pulses race or their cheeks redden, as so to justify the destruction of a particular provision."(fn7) Leff concludes that there is "nothing clear about the meaning of 'unconscionable' except perhaps that it is pejorative."(fn8) This "nebulous unconscionability standard" has been criticized as inviting "judges to patronizingly and paternalistically meddle in the proposed stipulations of presumptively competent divorcing adults, with very little guidance or principle other than our own personal sense of what feels fair and right."(fn9)
Further, where jurisdictions permit review of the substantive fairness of the agreement's terms at the time of enforcement, courts sometimes adopt a foresee-ability approach to analyze the substantive fairness of the agreement at the time of divorce.(fn10) Courts examine such agreements at the time of enforcement to determine whether facts and circumstances have changed such that enforcement of the agreement would fail the requirements of substantive fairness.(fn11) Most jurisdictions, however, now hold that if a change in circumstances was foreseeable at the time the agreement was entered into by the parties, such change will not render an agreement unconscionable.(fn12)
The concept of foreseeability is particularly vexing when applied in the context of prenuptial agreements. The attempt to determine what would or would not be foreseeable in a marriage is in effect to determine every life change or condition a spouse will endure during the duration of marriage in an increasingly complex society. The list of eventualities is endless: adultery, children, lack of children, career changes, a mid-life crisis, unexpected wealth or sudden poverty, physical health conditions, mental health issues, a plane crash or even a cataclysmic terrorist attack. All are foreseeable but not always expected.(fn13) At some level, everything is foreseeable in a marriage.(fn14)
The Evolution of Prenuptial Agreements in Georgia
The seminal Georgia case approving a prenuptial agreement is Scherer v. Scherer,(fn15) a 1982 decision in which the Supreme Court first set forth a three-pronged test for determining the enforceability of such agreements: (1) whether the agreement was obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of material facts; (2) whether the agreement is unconscionable; and (3) whether the facts and circumstances have changed since the agreement was executed, so as to make its enforcement unfair and unreasonable.(fn16)
In setting forth this test, Scherer required courts to analyze both the procedural and substantive fairness of prenuptial agreements. Significantly, Scherer specifically authorized courts to look at the substantive fairness of the agreement at the time it was executed and at the time of enforcement, which gave trial courts extremely broad discretion in determining the enforceability of prenuptial agreements.(fn17)
The Supreme Court of Georgia first limited the breadth of Scherer in 2004 in Adams v. Adams.(fn18) There, two days before the parties were married, they entered into a prenuptial agreement that provided that the wife would receive $10,000 for every year of marriage, with a cap of $100,000.(fn19) Also, the wife waived all claims to the husband's pre-marital property and all other claims shemay have growing out of the marriage and its dissolution; agreed not to make a "continued lifestyle claim"; and agreed to forfeit her rights if she engaged in "unforgiven adultery."(fn20) Both parties waived claims to separately titled property whether acquired prior to or during the marriage.(fn21) At the time of the marriage, the husband's assets were valued at $4,526,708 and the...
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