Cohabitation agreements act as an insurance policy for unmarried couples living together or those who aren’t in a civil partnership, helping to clarify rights, responsibilities, and financial arrangements. A question we are often asked is whether these agreements are legally binding and whether they hold up in court.
What is a Cohabitation Agreement?
Before delving into their legal status, let’s revisit what cohabitation agreements entail. These agreements are written documents that outline various aspects of a couple’s living arrangements, including property rights, financial responsibilities and childcare arrangements.
Generally, a couple uses a cohabitation agreement to clarify details like:
1. Who owns what at the start of the cohabiting or at the point the agreement is signed
2. How jointly owned items should be split if you separate
3. Financial commitments like payments of household bills and other outgoings
It is always advisable to obtain legal advice before preparing or signing an agreement as agreements can be set aside by a court if they were not fair and reasonable at the time of signing.
Legal Validity of Cohabitation Agreements
In many jurisdictions, including Scotland, cohabitation agreements are generally recognised as legally binding contracts, provided they meet certain criteria. While there is no specific legislation governing cohabitation agreements in Scotland, they are typically treated as legally enforceable contracts, subject to the same principles of contract law as other agreements.
Key Factors for Legal Enforceability
Several factors contribute to the legal validity and enforceability of cohabitation agreements:
1. Voluntary Consent: Both parties must enter into the agreement voluntarily, without coercion or undue influence. Each partner should have a clear understanding of the terms and implications of the agreement before signing.
2. Full Disclosure: The agreement should be based on full and honest disclosure of each partner’s financial situation, including assets, debts, income, and expenses. Failure to disclose relevant information could invalidate the agreement.
3. Fairness and Reasonableness: The terms of the agreement should be fair and reasonable, taking into account the respective contributions, needs, and circumstances of each partner. Agreements that are deemed excessively one-sided or unconscionable may be challenged in court.
4. Legal Formalities: Cohabitation agreements should be properly drafted in writing and signed by both parties. It’s advisable to seek legal advice to ensure the agreement complies with legal requirements and adequately protects both partners’ interests.
5. Changes in Circumstances: Cohabitation agreements should be reviewed periodically and updated as needed to reflect any changes in the relationship or financial circumstances. This helps ensure the continued relevance and enforceability of the agreement over time.
Challenges to Enforceability
Despite their legal validity, cohabitation agreements may face challenges to enforceability under certain circumstances. For example:
1. If the agreement is found to be fundamentally unfair or unjust, a court may refuse to enforce its terms.
2. If one party can demonstrate that they were coerced, misled, or under duress at the time of signing, the agreement may be deemed void or unenforceable.
3. Changes in circumstances, such as the birth of children or significant changes in financial status, could potentially invalidate certain provisions of the agreement if they are no longer equitable.
How can Johnson Legal Family Law help me?
It’s crucial to seek legal advice when drafting a cohabitation agreement to ensure its validity and enforceability. By carefully considering the needs and circumstances of both partners and addressing potential challenges to enforceability, a Family Lawyer can ensure a couple creates a solid foundation for their cohabiting relationship, safeguarding their rights and interests for the future.
Open communication about financial matters is key in any strong relationship, and a cohabitation agreement can protect you both in the future if you decide to separate.
If you would like to discuss or find out more about cohabitation agreements, we offer all our clients a free, 15-minute consultation call with one of our solicitors to determine how we can help. Call our office on 0131 622 8477, email [email protected] or submit your enquiry here.
