Determining Whether a Separation Agreement is Binding

What is a Separation Agreement?

A separation agreement is an agreement made between two people who are in married or common law relationship to sever their marriage and to resolve issues relating to children, support, property and other matters. It can be entered into prior to commencing divorce proceedings.
Separation agreements can be a powerful tool as they help spouses and/or parents resolve their issues and move on with their lives. They allow parties the freedom to control the outcomes of their matters as compared to court proceedings where a judge may decide on your behalf. However, if the agreement is not properly drafted or one party does not adhere to its terms, the matter can be made much more complex when addressing issues relating to custody , parenting time, child support, spousal support, or property.
Separation agreements are not the same as court orders. Agreements are premised on free will as both parties must agree to the terms. Whereas court orders are issued and enforced by a judge. Separation agreements are not binding on a judge. Both parties must still abide by the agreement. Individuals can go to court to enforce the terms of the agreement. If this occurs, a judge can interpret the terms of the agreement and sometimes impose harsher terms that appear in the agreement. Accordingly, hiring a lawyer to draft and review the agreement will lessen the likelihood of future litigation relating to the terms of the agreement.

Requirements for a Valid Separation Agreement

For a separation agreement or court order to be binding both parties have to sign it (if you are using a court order as a separation agreement, the person who prepared the order has to sign it). You can’t file a separation agreement without a signature, although you can filed a court order and it becomes binding.
As long as a party voluntarily consents to the terms of the order, and that consent is not obtained through fraud, coercion, or misuse of confidential information, and understands what the rights are they are waiving, the court will uphold the order as signed. The agreement does not have to be notarized or witnessed in order to be binding (that is a title issue).
The agreement does not have to follow the Child Support Guidelines to be binding, as long as the parties agree to the support terms. Even if not all rights are waived, if the party was represented by counsel and understands what those rights are and waives them, the order is binding. If you represent someone who thinks something is not fair, and they insist on going forward anyway, you have to allow your client to proceed but you have to make them sign off that you advised them of what the law is and what the rights are and that they choose not to have them. Make sure they understand that if the agreement is incorporated into a court order, it is a court order and the rights they waive are gone and it is binding on them.
If you don’t have a separation agreement incorporated into a court order signed by the parties and your client wants to incorporate it into a court order anyway, then you use Rule 7C and convert the agreement into an affidavit because the agreement can’t just be "filed" in the court file. If the form of an agreement is incorrect with regard to it being a recommendation, then your only choice is the affidavit rule. A mere reference to the agreement on a court docket won’t work. It also has to be referenced in the body of the order, not just referenced in the recitals.
As an example, I have seen one of my adversaries cite the statute that allows for a "court order" to be held as binding and not raise Rule 7C at all and you are good if you make reference in the body of the order to the separation agreement which is the basis of the order. Rule 7C is a bit of a trap for the unwary. If none of that occurs, in terms of putting in the requisite language about the Court making the binding agreement binding (and this is in the memorandum), then you are going to end up having the agreement attacked as not being binding.
When you have a valid separation agreement that is incorporated into a court order, you can have the court enforce the agreement by way of contempt.

Typical Provisions in a Separation Agreement

Separation agreements typically have all the major family law issues covered in the one document. So, it is important to ensure that you are well aware of what those issues are and that they are covered.
Some of the typical clauses in a separation agreement are as follows:

• Division of assets – This refers to how the couple’s assets will be divided. For example, provisions can be made for who will keep the house and who will pay certain debts. If you cannot determine how assets will be divided during separation with your spouse, it is wise to have a separation agreement to do so. Courts may be involved in dividing up property that you own jointly without an agreement.
• Spousal support – Spousal support refers to payments made by one spouse to another for financial assistance. Details such as how long will be paid, and how much should be paid, should be outlined.
• Child custody – Child custody determines where the child will live and who will take on the legal responsibilities for your child. You may have joint legal custody or one primary caregiver with sole custody.
• Visitation rights – Visitation rights refer to what access schedule a child will have with a parent once he or she is living with somebody else, such as the other parent. If visitation is not outlined in a separation agreement, a judge can decide how this will be handled according to the Canadian Divorce Act.

Every separation agreement will be different, depending on the circumstances of the marriage.

Importance of Legal Advice on Drafting an Agreement

Unless you are a family lawyer yourself, or unless you read a lot of web sites and newsletters from family lawyers, it’s unlikely that you are going to know the law off the top of your head. For example, if you want to know how much child support you are supposed to pay, unless you ask – even of an average non-lawyer – you are very likely to get a clumsy fact specific answer. This is because the person you are talking to knows that there is discretion in child support cases, and most lay people aren’t really familiar with the factors that the tribunal (judge/arbitrator/etc.) has to take into account when deciding how much child support you are supposed to pay.
The same goes for preparing separation agreements. Unless you have dealt with an agreement before, you will not be aware of the variations to standard clauses that can be used to ameliorate what would otherwise be a harsh result for one of the parties. Without any experience, you would simply prepare the agreement without regard to how it is being done in practice by family lawyers. This lack of knowledge or experience can have a profound impact on the outcome of the agreement you prepare.
Similarly, without a lawyer there to lend an objective perspective, it is difficult to judge whether an agreement is comprehensive enough to cover the circumstances, or too short, such that there is a dispute once it is finally put in place.
Lawyers spend years honing their skills in understanding and rephrasing and rewriting agreements and their relevant legislation, so that they can provide a concise and accurate advice. Without a lawyer being involved as a third party, they would have no way of knowing whether their agreement does the job it was intended to do. Equally important, lawyers also have a different perspective on issues than parties do; they are not personally invested in the process and are able to see situations and issues clearly. A lawyer can tell you, after analyzing the facts you present, whether the agreement you have prepared is fair (or completely unfair), whether you would expect a tribunal to bind the other person, whether you are preventing the tribunal from making binding decisions for you, whether you are inviting problems, and so on.
As such, the best advice is to be cautious about writing your own agreement. A better idea is to use a sample agreement, and then take your time filling in the blanks based on the facts that you know. Then bring this draft to your lawyer for advice in drafting the agreement in such a manner that it will be binding on both of you.

Challenging a Separation Agreement

Separation agreements can be contested or deemed invalid in cases where one party can demonstrate that it is fraudulent or was the product of coercion. In addition to invalidating a separation agreement, a judge may void any part of the agreement if an important or significant event has occurred that makes enforcement impractical or unjust.
A separation agreement drafted between divorcing spouses will generally be binding and enforceable unless, in the view of a judge, its enforcement would be manifestly unconscionable. Unconscionability refers to an absence of meaningful choice or to contract terms that are unreasonably favorable to one party. The rationale underlying this contract law principle is that certain agreements are so unfair to one party as to preclude enforcement.
An example of an unconscionable agreement would be one in which one party retained a portion of the jointly owned bank savings account but failed to account for it when distributing the balance of the accounts during equitable distribution.
A party seeking to void a separation agreement must affirmatively request the court to do so. Because the Separation Agreement probably provides that the parties are to be bound by it unless the court finds or determines otherwise, a party wishing to challenge its validity must first ask the Court to find that the agreement is invalid and that the Court is empowered to enter Orders that might be inconsistent with the terms of the agreement.
Under New Jersey law, the most common example of a circumstance that may result in a finding of unconscionability is when there are conditions in the agreement that enable one party to later take advantage of the other party in a way that is contrary to the purpose the parties intended to achieve with the agreement .
For an agreement to be deemed unconscionable, it does not have to be shown, for example, that one party had no access to counsel or was not represented by counsel. It is also not a prerequisite that a party seeking to strike or void the agreement prove or show that the party who prepared the agreement obtained a superior bargaining position or was the dominant party in the transaction.
In other words, the burden of proof is not placed on one party to prove that it was treated inequitably or unfairly. Nor must a party seek a determination that an agreement was unconscionable at the time it was made. Instead, it is the circumstances at the time enforcement is sought that will likely determine a court’s findings. That is, what were the circumstances between the parties at the time one party filed the motion to enforce the agreement. Were the parties’ circumstances so fundamentally different than the time they entered into the agreement that enforcement, in light of those drastic changes, would be manifestly unfair or unjust.
For example, an agreement that is relatively recent may be void if the parties have already remarried or started new families. Certainly, if the order obligates that one party make child support payments that exceeds the payor’s ability to earn income, that agreement could be rendered unenforceable.
Accordingly, today’s events can be the proper time to question the enforceability of a poorly written separation agreement or one that has become unjust in the eyes of a judge.

Enforcement of Separation Agreements

The enforcement of separation agreements is the same way for agreements signed after the breakdown of the relationship. The agreement is a contract, and the courts will enforce it as long as it is complete and properly signed.
In Ontario, the Family Law Act allows the court to make a Final Order on virtually all matters on consent, including an order that makes the terms of a separation agreement into court orders on consent, which is known as a Consent Order.
If you have entered into a separation agreement, and one party to the agreement has not fulfilled his/her obligations under the agreement, the other party can bring a motion with the Court seeking a Court Order compelling the other to fulfill their obligations under the agreement. This can be accomplished with the assistance of a Family Law Lawyer because these types of applications are typically referred to as "urgent". There is the possibility of making a Court Order for arrears, however this is not without its challenges if there is an expectation that the arrears will be paid in a short period of time. It should be noted that even in circumstances where the Court order is granted for arrears, there is no guarantee that the person required to pay the arrears, will actually pay.
When one party is not fulfilling their obligations, the other party can make an application for a court order, however in the event that the person who is required to comply has no income and is hiding out (assuming that the non-compliant party has not been directing deposit from pay to someone else) or has no assets, there isn’t much that can be done in the interim to compel that person to disclose their income or pay. It is suggested that the court requires evidence of due diligence of the applicant (the person seeking to enforce) to enable the applicant to make the appropriate application to the court.
The burden of proof rests with the party seeking to enforce the separation agreement to attempt to locate the whereabouts of the non-compliant party. The court may allow for evidence of due diligence, however this will depend on the merit of the case and discretion of the judge. If the person does not comply with the terms of a court order, the enforcement process will be somewhat easier.

Modifying a Separation Agreement

Separation agreements are subject to modification by order of court upon a showing of "changed circumstances" and that the proposed modification would be in the best interests of the child. See 23 Pa.C.S.A. §3105 (a). Simply because an agreement may not be modified by one party unilaterally does not mean that it cannot be modified by agreement of the parties. Parties may enter into an amended separation agreement and submit it to the court for approval. Once the amended agreement is approved by the court, the agreement is incorporated into the order that governs the parties and controlling until the order is otherwise modified by the court. Generally speaking, modified separation agreements are subject to the same factors applied to separation agreements in general to determine what is in the best interest of the child.

Comparison of a Separation Agreement and Divorce Decree

lthough they may seem similar, a separation agreement and a divorce decree are two very different things and not all divorced spouses will have both.
When a separating couple decides to take the next step, they can file for divorce. At this point, the separation agreement is typically included in the divorce decree, which explains that it was agreed upon as part of the divorce process. What happens if a couple decides to separate before filing for divorce? At that point, they can enter into a separation agreement even prior to the separation becoming legal that outlines all terms agreed upon.
It will explain everything concerning the relationship and finances during the period of separation, such as:
Once everything is completed, the couple simply updates the separation agreement to include any terms about the final divorce decree . In some instances, such as when a spouse is entitled to a significant benefit later on, like a pension, they may consider filing for divorce sooner or get a court order that confirms that they were married during a specific period of time. A separation agreement can be important as it gives a couple time to figure everything out.
Sometimes, however, one spouse fights the divorce after a separation agreement has been entered. This may happen because the spouse wants to make changes to the document or even the terms of the divorce. At this point, the separation agreement has false legal ramifications. Therefore, a judge requires that unless there are compelling reasons to the contrary, that both spouses must agree to the terms of the agreement.
If both parties are in agreement, the separation agreement will become a legally binding divorce decree that explains in detail everything that is relevant to the marriage ending. This document must be filed by a lawyer and by that process, the couple is officially divorced.