Agreements under the Family Law Act
The Family Law Act, in effect since March, 2013, recognizes agreements made between spouses dealing with family law issues, including division of property and debts. While many oral contracts can be binding, agreements addressing family law issues should be written. A written agreement may serve as evidence of its terms, while helping to prove that the parties considered legal principles that might be raised if the agreement is later challenged.
In particular, the Family Law Act allows a court to set aside an agreement concerning division of property and debts if there is evidence of:
- failure to disclose significant property or debts;
- procedural unfairness;
- lack of understanding of the nature or consequences of the agreement; or
- grounds under the common law for voiding the agreement;
and, in addition to these factors, the court concludes that it would replace the agreement with a court order that is substantially different from the agreement.
Courts can still decide to set aside an agreement even if none of the above factors are present, if it finds that the agreement is “significantly unfair”, also taking into account:
- the length of time that has passed since the agreement was made;
- the intention of the spouses when making the agreement;
- the degree to which the spouses relied on the terms of the agreement.
The threshold of “significant unfairness” required for the court to set aside an agreement is a new concept under the Family Law Act, with few court cases yet decided.
Agreements dealing with family law issues should incorporate the new legal principles found in the Family Law Act. Spouses entering into such agreements should consider seeking legal advice and should “put it in writing”. If you have questions about family law agreements, contact Cohen Buchan Edwards LLP at 604.273.6411 and speak with one of our family lawyers.