There are five different types of domestic contracts permitted in Ontario, and they are set out in Part IV of the Family Law Act:
- Cohabitation agreements;
- Marriage contracts;
- Separation agreements;
- Paternity agreements; and
- Family arbitration agreements.
Cohabitation agreements are generally entered into by non-married couples and signed before they start cohabiting together. You can state them to become marriage contracts if the parties decide to marry later in life. Cohabitation agreements can deal with all financial aspects of the relations but CANNOT discuss custody or access arrangements for children or future children.
Marriage contracts are entered into prior to marriage or after but cannot be entered into after the marriage breakdown. The same limits listed for cohabitation agreements apply to marriage contracts. Section 52 of the Family Law Act, outlines the issues that can be included in a marriage contract:
- Ownership or division of property, however a provision that limits an individual’s rights to the possession of the marital home is not enforceable – this rule is specified under Part II of the Family Law Act and applies to any circumstance within family law;
- Support obligations – both child and spousal;
- The right to direct education and moral training of children BUT not custody or access; and
- Any other matter in settlement of the parties’ affairs.
Separation agreements are one of the more common domestic contracts used. Any couple that does not result in litigation will generally sign a separation agreement. The agreement is used as a point of reference as they primarily deal with all rights and obligations arising from the relationship breakdown.
Paternity agreements are usually applicable to common-law spouses who have biological children. These will generally be used to set out the decision-making reasonability of each parent and consider the child’s best interest. Matter dealt with in this domestic contract include custody and access, support payments, child-care costs, extra-curricular activities and/or post-secondary education.
Family Arbitration Agreements
Family arbitration agreements, under s. 51 of the Family Law Act are decided before arbitration proceedings. Arbitration is a type of alternative dispute resolution, where the parties sit before an impartial third party who hears both sides of the dispute and then makes a decision based on the facts. Both parties participate by signing an agreement that stipulates who will be the arbitrator, where the arbitration will be held, and the issues to be dealt with during the arbitration. The key difference between an arbitration forum and a court forum is that the arbitrator is bound by the issues and boundaries set in the arbitration agreement. If an issue arises during the arbitration that is not stipulated in the agreement, the arbitrator cannot decide on it. Any determination made by the arbitrator is incorporated into an award and binds both parties legally. The conditions decided upon after the arbitration’s conclusion are enforceable by law under s. 59.6(1) of the Family Law Act.
If an individual is looking to challenge any of the above domestic contracts, s. 56 of the Family Law Act sets out grounds on which a challenge can be made. Some of the grounds set out in s. 56 are:
- If a party fails to disclose a significant asset or debt in existence when the contract was formed;
- If a party fails to understand the nature and consequences of the agreement; and
- Any other ground upon which an ordinary contract may be attacked.
Another solution to enforce a domestic contract is to file it with the court. Under s. 35 of the Family Law Act, it permits a party to file a domestic contract accompanied by an affidavit with the courts. This allows the support provided for in the contract to be enforced by the Family Responsibilities Office (FRO) or varied and/or recalculated by the courts (s. 35(2)).
Why Choose Us?
At Bickhram Litigation, we understand that drafting or challenging a Domestic Contract can be challenging and emotionally draining. Our lawyers have a great deal of experience helping clients bring and litigate these matters. We provide sound legal advice and the support you need to make this challenging time a little less strenuous for our clients and their families. For more information on Domestic Contract proceedings and litigation, please get in touch with us for a complimentary consultation.
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