Understanding B.C. Cohabitation Agreements

Significant Unfairness & Voidable Reason at Common

In part 1 of this Cohabitation Agreements in B.C. series, we considered two of the common reasons why cohabitation agreements may be set aside by the Courts in B.C. – lack of independent legal advice and inadequate financial disclosure.

Section 93 of the Family Act provides the statutory basis to set aside an agreement made respecting property. The section is reprinted below:

93 (3) On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement described in subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:

(a) a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;

(b) a spouse took improper advantage of the other spouse’s vulnerability, including the other spouse’s ignorance, need or distress;

(c) a spouse did not understand the nature or consequences of the agreement;

(d) other circumstances that would, under the common law, cause all or part of a contract to be voidable.

(4) The Supreme Court may decline to act under subsection (3) if, on consideration of all of the evidence, the Supreme Court would not replace the agreement with an order that is           substantially different from the terms set out in the agreement.

(5) Despite subsection (3), the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement if satisfied that none of the circumstances        described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:

(a) the length of time that has passed since the agreement was made;

(b) the intention of the spouses, in making the agreement, to achieve certainty;

(c) the degree to which the spouses relied on the terms of the agreement.

Significant Unfairness & Voidable Reason at Common

The sections cited above essentially boil down to two further issues beyond those explored in part 1, they are: a) significant unfairness and b) a voidable reason at common which could cancel a contract. The issue of significant unfairness arises more frequently in cases where the marriage has been of a long duration and where one spouse would be detrimentally position if the agreement is upheld. The issue of a voidable reason at common law arises in cases such as where the agreement was signed under duress or through the use of fraud.

Related Cohabitation & BC Family Law Posts

• Cracking Open Cohabitation Agreements – Part 1
• 3 Common Types of Agreements in BC Family Law
• BC Court of Appeal Considers Spouses Who Keep Finances Separate
• Cohabitation Agreements in Wills Variation Claims

 Contact our Vancouver Family Law Attorneys

If you have questions regarding the creation or the enforceability of a cohabitation, prenuptial, or marriage agreement, contact the Kushner Law Group today at 604-629-0432 to schedule consultation.