Domestic Contracts

A domestic contract is a written agreement between people in a relationship. This includes married couples and common law couples.  When you and your partner decide to start living together or decide to get married, you can choose to create a domestic contract.

A domestic contract records the rights and responsibilities you have agreed to while living together. It can also record your agreements about rights and responsibilities if the two of you ever separate.

A valid domestic contract is legally binding. This means a court can order you to honor the promises you make in a domestic contract.

Different rules can apply depending on whether you and your partner are married or living common-law. Typically, a married couple would make a marriage contract, while a common law couple would create a cohabitation agreement. Both married and common-law couples can make separation agreements.

A domestic contract can be helpful for many reasons:

Clear communication

Domestic contracts can help create open communication between partners. This way, you both understand your expectations for one another during and after your relationship.

Avoiding conflict

If you create an agreement you are both happy with, you can often avoid going to court later. This can give you both more predictability. If you apply to court, a judge decides for you both.

With a domestic contract, you can agree to things while you are still on good terms, rather than waiting until there is a conflict. Making an agreement can help you avoid future legal conflicts about things like:

  • spousal support
  • division of pensions and property
  • division of debts
  • ownership of your shared home
  • child support
  • parenting arrangements

Deciding what’s fair

The law has certain standard rules about what happens when a couple separates. An agreement can let you handle things differently than what those rules say. For example, rules in New Brunswick’s Marital Property Act generally assume that married spouses will have an equal share of their marital property, dividing it 50/50. A domestic contract could replace the rules about property division in the Act if you both agree that something else would be fair in your situation. This lets you protect any property you brought into the relationship and want kept separate, for example. It can also help give you promises of financial security if you depend on your partner financially.

Creating commitments between unmarried people

If you and your partner aren’t married, a domestic contract lets you record your agreed rights and obligations to one another. For example, most of the rules in the Marital Property Act about shared property do not apply to common-law couples. If you and your partner make agreements in a contract, though, you can apply to the court under this Act to enforce your agreement to share your property.

You can use domestic contracts for different purposes. Depending on its purpose, a domestic contract might also be called something else.

Marriage Contracts

A marriage contract is an agreement you and your partner can make before getting married. You can also create a marriage contract after getting married, while living together. In a marriage contract, you can think ahead and agree to your rights and responsibilities:

  • during your marriage,
  • when you ever separate, or
  • when one of you dies.

A marriage contract might include agreements about:

  • who owns what property,
  • how you will divide your property,
  • future spousal support obligations
  • other issues that are important to you if you ever separate,

Cohabitation Agreements

A cohabitation agreement is a contract that you and your partner can make before moving in together. You can also create a cohabitation agreement afterwards while living together.

This type of agreement is an option for couples who are living together but are not married to one another.

In a cohabitation agreement, you can agree to your rights and obligations:

  • while you and your partner live together,
  • when you separate, or
  • when one of you dies.

Your cohabitation agreement might include agreements about:

  • who owns what property,
  • how you will divide your property,
  • whether either of you will be responsible for spousal support if you separate,
  • other important issues to settle if you ever separate.

Your cohabitation agreement could later be considered a marriage contract if you and your partner get married.

Separation Agreements

A separation agreement is a contract that you can create when you separate from your spouse or common-law partner. Separation agreements allow you to agree to your rights and obligations when you separate. You may create a separation agreement if:

  • you were living together but have separated and are now living apart
  • you are still living together but have agreed to start living separately

Your separation agreement can include:

  • Who owns what property,
  • How you will divide your property,
  • your support obligations to each other and your children,
  • How you plan to raise your children, for example their education and religious upbringing,
  • Who will be responsible for making important decisions about your children,
  • Where your children will live,
  • How much time your children will spend with each parent, and
  • any other topic you need to address so you can settle your affairs.

A note about parenting plans

Marriage contracts and cohabitation agreements cannot include parenting plans. This means they should not include agreements about child support, decision-making responsibility, and parenting time for your children. Parents should always make those decisions based on the current best interests of your child, so those decisions must be made when you separate.

When a marriage contract or cohabitation agreement does include plans for your children, these parts of the agreement will not be enforceable or legally binding.

Unlike a marriage contract or cohabitation agreement, your separation agreement can include your parenting arrangements. This would include child support, decision-making responsibility, and parenting time. If you are separating, it is usually a good idea to put your parenting arrangements in writing.

To create a domestic contract, you and your partner can start by identifying the questions you want to address. When you know what commitments are important to you, it is easier to find out where you agree and disagree.

Reaching an agreement together

You and your partner can try to reach an agreement by discussing your needs and wishes together. It can be helpful to start here. Even if you can only agree on some things, it can save time and money if you do not have to go to court or hire a professional to resolve all your issues.

If you and your partner want to create a domestic contract but you don’t agree on all the details, you have other options.

Mediation

You can use mediation to help you reach an agreement if you cannot agree on your own. Mediation is when you ask a mediator to help guide you to an agreement.

A mediator can be a lawyer or another professional like a social worker with mediation training. Mediators are trained to help people resolve their differences. The mediator does not give advice but instead helps you resolve disagreements in an unbiased and neutral way.

Mediation is a voluntary process. Both of you must be willing to participate.

In mediation, you and your partner make decisions about the terms of your agreement. The mediator is there to help guide the discussion. The mediator does not make any final decisions, and they do not give legal advice.

Collaborative Law

In collaborative law, each of you have the guidance and support of a collaboratively trained lawyer. You all meet intending to reach an agreement. You usually sign a contract that the lawyers will not continue to represent you if you decide to go to court.

Collaborative law is a voluntary and non-adversarial process. Both you and your partner will disclose all relevant information and communication must be respectful. You work with your lawyers as a team to understand each other’s needs. The goal of collaborative law is to come up with the best solution for both of you, and for your children.

If you and your spouse or partner reach an agreement through collaborative law, your lawyers will work with you to finalize the contract.

Traditional Negotiation with Lawyers

You can create an agreement by hiring separate lawyers who help you negotiate without going to court.  Often, this means the lawyers communicate directly with each other on your behalf. This can also include meetings with all of you present to discuss the terms of your agreement.

After the negotiation process, the lawyers can give you advice on the details and wording of your agreement. Your lawyers can also draft the contract.

Sometimes couples can negotiate an agreement on some issues but not all of them. If that happens, your lawyers can draft an agreement covering the issues you have settled. This can then save further legal fees by taking only the remaining disagreements to mediation, negotiation, or to court.

For the remaining issues, your lawyer could represent you in a court application if you decide that is necessary. You can still settle any of your issues in an agreement at any time before your court hearing.

A domestic contract must be in writing and signed by both you and your partner. The agreement must also be witnessed.

When you and your partner reach an understanding, one of you can ask a lawyer to draft the contract. Once a draft contract is ready, the other partner should take it to a different lawyer for review. This is called “independent legal advice.” It is important that you each get separate independent legal advice to be sure that you understand your rights and responsibilities under the agreement.

If one of your lawyers has concerns about the agreement, they will explain those concerns to you. If your lawyer advises you not to sign the agreement, this is a serious warning. The purpose of the lawyer’s advice is to be sure you fully understand the consequences of signing the contract.

Once the contract is written and both of you have had independent legal advice, you can either go through another period of negotiation or sign the contract. You will be expected to follow the agreements you made after signing the contract.

You must each sign your domestic contract with a witness present. Your witnesses must also sign the contract.

If you both agree to change your domestic contract, you must prepare a new agreement in writing. You both must sign the new agreement with a witness. It is usually a good idea to get independent legal advice before signing a new contract.

If one of you disagrees to changing the domestic contract or disagrees about what should be changed, then one of you may need to apply to the court to ask for an order. Usually, courts respect the agreements in domestic contracts, but there are exceptions. Domestic contracts must follow certain rules. They cannot contain agreements that break the law. See the section below titled “When Someone Refuses to Follow the Contract” for more information.

You can file certain kinds of separation agreements with the court. You only need to do this if you want to enforce child support or spousal support payments through the Office of Support Enforcement.

According to the Family Law Act, an agreement must meet certain requirements before you can file it with the court. To meet these requirements, the agreement must:

  • be in writing,
  • include the name of the person who will receive the payments
  • include the name of the person who will make the payments,
  • be signed by both people,
  • be witnessed,
  • say the exact payment amount, and
  • say when and how the payments will be made

Once you have filed an agreement with the court, you can file it with the Office of Support Enforcement (OSE). The OSE can take steps to enforce the support payments.

Typically, people do not file marriage contracts and cohabitation agreements with the courts.

You can try to renegotiate the terms of your contract if the other person refuses to follow it. You can do this by communicating and reaching an agreement together, by using mediation, or through collaborative law. See the section above titled “Reaching an Agreement.”

For child and spousal support payments, the Office of Support Enforcement (OSE) can take steps to enforce those parts of the agreement. One of you must file the agreement with the court for the OSE to enforce it.

You can also file a court application for breach of contract if your former partner or spouse does not follow the other terms of your domestic contract.  Courts generally respect people’s agreements and expect you to follow them. There are some exceptions to this. For example:

  • The court may ignore and change clauses about parenting arrangements if they believe it is in a child’s best interests.
  • The court can also change agreements about child or spousal support depending on the circumstances. For example, all parents and all courts must follow the Federal Child Support Guidelines when calculating child support. You can apply to the court to ask for a child support order that follows the Guidelines, even if you signed an agreement that said otherwise.
  • According to the Marital Property Act, the court can ignore any part of an agreement that is unfair. For example, you may be able to challenge an agreement that you were forced to sign, or that you signed without getting independent legal advice.
  • The court may not uphold an agreement if they discover that one of you lied or hid information.
  • Domestic contracts follow the same rules as any other contract. If the contract has clauses that violate the law or the public order, the court will not enforce them.