Legal Pitfalls to Avoid When Drafting Marriage Contracts

Understanding Marriage Contracts in Ontario

Definition and Legal Framework under Ontario’s Family Law Act

Under Ontario’s Family Law Act, a marriage contract is a legally binding agreement between two people who are married or plan to marry. It allows them to make decisions about property division, spousal support, and financial responsibilities. However, there are strict rules regarding its enforceability.

For a marriage contract to be valid:

• It must be in writing and signed by both parties.
• It must be signed in the presence of a witness.
• Both parties must provide full financial disclosure before signing.
• Neither party should be coerced or pressured into signing.

If these conditions are not met, a court may set aside the agreement.

Difference between Marriage Contracts and Cohabitation Agreements

Although similar in purpose, marriage contracts and cohabitation agreements differ in their application:

• Marriage Contracts: These agreements are for couples who are married or planning to marry. They focus on property division, spousal support, and financial obligations.
• Cohabitation Agreements: These are designed for common-law partners who live together but are not legally married. They cover similar aspects but do not automatically provide the same property rights as a marriage contract.

A key distinction is that a cohabitation agreement automatically becomes a marriage contract if the couple later gets married.

What a Marriage Contract Can and Cannot Cover

While marriage contracts provide significant flexibility, there are legal limitations on what they can include.

What a marriage contract can cover: ✔ Property division – How assets and debts will be divided if the marriage ends.
✔ Spousal support – Whether one spouse will pay financial support to the other, and under what conditions.
✔ Financial obligations – Responsibilities during the marriage, such as handling household expenses.
✔ Estate rights – Agreements on inheritance and division of assets upon death.

What a marriage contract cannot cover: ✖ Child custody and support – Any clause that limits a parent’s right to custody or a child’s right to support is unenforceable. Child-related matters are determined based on the child’s best interests at the time of separation.
✖ Unfair or illegal terms – Any provision that violates public policy, such as waiving all spousal support in cases of hardship, may be struck down by the courts.
✖ Non-financial matters – Lifestyle clauses, such as requirements about personal behaviour, are generally not enforceable.

Common Legal Pitfalls to Avoid

Failing to Provide Full Financial Disclosure

One of the biggest reasons marriage contracts are challenged in court is the failure to disclose all financial details. Ontario law requires both parties to fully and honestly disclose their assets, income, debts, and liabilities before signing a marriage contract.

Why Both Parties Must Disclose All Assets, Income, and Debts

• Ensures fairness in the agreement.
• Allows both parties to make informed decisions about their rights and obligations.
• Helps prevent claims of fraud or misrepresentation in the future.

Consequences of Hidden Assets

If a spouse hides assets or understates their financial situation, the other party may later challenge the contract. The Ontario courts have the authority to set aside a marriage contract if:
✔ There was failure to provide full financial disclosure at the time of signing.
✔ One party can prove they were misled about the other’s financial standing.
✔ The contract results in an unfair financial outcome due to non-disclosure.

Not Obtaining Independent Legal Advice (ILA)

A common mistake couples make is not seeking independent legal advice (ILA) before signing a marriage contract. Having a divorce lawyer review the agreement ensures that both parties fully understand their rights and obligations.

How Independent Legal Advice Protects Both Spouses

• Ensures both parties understand the contract and its long-term implications.
• Protects against claims of coercion, pressure, or misunderstanding.
• Helps ensure the contract is fair and legally enforceable.

Why Ontario Courts May Invalidate Agreements Signed Under Pressure

Ontario courts may set aside a marriage contract if one spouse signed under:
✔ Pressure or duress (e.g., being forced to sign shortly before the wedding).
✔ Imbalance of power (e.g., one spouse has significantly more legal knowledge or financial control).
✔ Lack of legal representation, leading to an unfair agreement.

To strengthen the enforceability of a marriage contract, both spouses should have separate lawyers review the agreement before signing.

Including Unenforceable or Unfair Terms

While marriage contracts offer flexibility, certain provisions may be deemed unenforceable by Ontario courts.

Provisions That Violate Ontario Law

Certain topics cannot be included in a marriage contract, including:
✖ Child custody and child support arrangements – These decisions are made based on the child’s best interests at the time of separation, not a pre-existing agreement.
✖ Waivers of spousal support in cases of hardship – A contract cannot leave one spouse in financial distress post-divorce.

Unconscionable Terms That May Be Deemed Unfair by the Court

Even if a marriage contract meets legal requirements, Ontario courts can still invalidate parts or all of the agreement if it is found to be:
✔ Grossly unfair to one party (e.g., leaving one spouse with no financial support).
✔ One-sided due to lack of negotiation or coercion.
✔ Contrary to public policy, meaning it is morally or legally unacceptable.

To avoid this pitfall, couples should ensure the contract is fair, balanced, and legally compliant under Ontario’s Family Law Act.

Signing Under Duress or Coercion

One of the most common reasons a marriage contract may be challenged or overturned in Ontario courts is if one party signed under duress or coercion. A contract should be freely negotiated and agreed upon by both spouses without external pressure.

Why Timing Matters: Avoid Last-Minute Agreements Before a Wedding

• A marriage contract should be signed well in advance of the wedding date.
• Last-minute agreements can be viewed as coercive—if one party feels pressured to sign to avoid delaying or cancelling the wedding, a court may later invalidate the contract.
• Legal professionals recommend that couples finalize the agreement at least a few months before the wedding to ensure that both parties have ample time to review, seek legal advice, and negotiate any terms.

How Coercion Can Make a Marriage Contract Invalid

Ontario courts may set aside a marriage contract if there is evidence of coercion, undue influence, or manipulation. This includes:
✔ A significant power imbalance (e.g., one party dominates financial decisions and pressures the other into signing).
✔ One spouse using threats or emotional blackmail to force the other into agreeing to unfair terms.
✔ Signing the contract under stressful circumstances, such as right before the wedding when emotions are high.

To protect the validity of a marriage contract, both spouses should:

• Have sufficient time to review the agreement.
• Negotiate openly without feeling rushed.
• Seek independent legal advice to ensure the agreement is fair and enforceable.

Failing to Update the Contract over Time

A marriage contract is not a one-time agreement—as life circumstances change, so should the contract. Failing to update a marriage contract can lead to serious complications if the couple separates, especially if significant changes have occurred since the agreement was signed.

Why Significant Life Changes May Require Contract Revisions

A marriage contract that was fair at the time of signing may become unfair or outdated due to:

✔ The birth of children – Financial obligations may change, and previous terms might no longer be suitable.
✔ Major asset acquisitions – If one or both spouses acquire significant property, a business, or investments, the contract should be updated to reflect these changes.
✔ Career shifts and financial status changes – If one spouse experiences a substantial increase or decrease in income, the existing terms may no longer be appropriate.
✔ Changes in Ontario’s family law – Laws regarding property division and spousal support may evolve, making it necessary to adjust the contract to remain compliant.

Best Practices for Updating a Marriage Contract Post-Marriage

• Review the contract every few years or after any major life event.
• Consult a family lawyer to determine if revisions are necessary.
• Both parties must agree to changes and sign an updated agreement with legal witnesses.
• Ensure full financial disclosure is updated to reflect current assets, debts, and income levels.

Poor Drafting and Ambiguous Language

A marriage contract is a legally binding document, and any ambiguity in its wording can lead to misinterpretation, legal challenges, and costly disputes. Courts in Ontario tend to favour clarity and fairness, meaning poorly drafted agreements are more likely to be contested and possibly set aside.

Importance of Clear, Precise Language to Avoid Future Disputes

• A well-drafted marriage contract should leave no room for confusion about the rights and obligations of each spouse.
• The contract should use clear, straightforward wording while still ensuring legal accuracy.
• Any financial terms, spousal support obligations, and property division agreements should be explicitly stated to prevent future conflicts.
• The contract should specify what happens in different scenarios, such as if the couple has children, one spouse becomes unemployed, or significant assets are acquired.

Common Drafting Mistakes That Can Lead to Legal Challenges

✖ Vague or undefined terms – Words like “fair share,” “reasonable amount,” or “adequate support” are open to interpretation and can create disputes.
✖ Inconsistent clauses – If different parts of the contract contradict each other (e.g., one clause waives spousal support while another references financial support obligations), courts may set it aside.
✖ Failure to include dispute resolution terms – The contract should outline how disputes will be resolved, such as through mediation or arbitration before litigation.
✖ Ignoring legal updates – Ontario’s Family Law Act changes over time, and an outdated contract may conflict with new laws.
✖ Not specifying jurisdiction – The contract should clearly state that it follows Ontario law, preventing jurisdictional conflicts if one spouse moves to another province or country.

To avoid these pitfalls, couples should consult a family law lawyer when drafting their agreement. Precise, legally sound language ensures that the contract remains enforceable and serves its intended purpose.

Overlooking Spousal Support and Property Division

A marriage contract should clearly outline how property will be divided in the event of separation or divorce. Ontario has specific laws governing property division and spousal support, and a contract that ignores or contradicts these laws may be unenforceable.

Ensuring the Contract Aligns with Ontario’s Equalization of Net Family Property

• Ontario follows the equalization of net family property (NFP) principle, meaning that any increase in a spouse’s net worth during the marriage is typically divided equally upon separation.
• A marriage contract can override Ontario’s default equalization rules, but only if it is fair, reasonable, and legally valid.
• Courts may invalidate a marriage contract that unfairly excludes one spouse from property rights without appropriate compensation.
• If a couple owns a matrimonial home, special rules apply—even if one spouse owned it before marriage, the other spouse may still have rights to it unless explicitly addressed in the contract.

When Spousal Support Waivers May Not Be Legally Binding

A marriage contract can limit or waive spousal support, but such provisions are not always enforceable. Ontario courts have the power to override a spousal support waiver in the following circumstances:

✔ Significant financial hardship – If one spouse would suffer severe financial hardship post-divorce, the court may order support despite the contract’s waiver.
✔ Unequal bargaining power – If one spouse was pressured into signing the contract, had no legal representation, or was financially disadvantaged, the waiver may not hold up.
✔ Unforeseen life changes – If circumstances have changed drastically (e.g., one spouse sacrificed career opportunities to raise children), the court may intervene.

Best Practices for Addressing Spousal Support and Property Division in a Marriage Contract

• Clearly define how property, including the matrimonial home, will be divided upon separation.
• If spousal support is waived, ensure the waiver is fair, reasonable, and voluntarily agreed upon with full legal advice.
• Review and update the contract over time to reflect major life changes, such as having children or significant career shifts.

How to Ensure a Legally Sound Marriage Contract

Working with a Family Lawyer Experienced in Ontario’s Marriage Contract Laws

One of the most important steps in drafting a legally enforceable marriage contract is consulting a family lawyer. Ontario courts highly discourage DIY contracts because they often fail to meet legal standards, contain vague or unenforceable terms, or lack necessary financial disclosures.

Why You Need a Family Lawyer

✔ A lawyer ensures the contract is legally compliant with Ontario’s Family Law Act.
✔ Both spouses should receive independent legal advice (ILA) to prevent future claims of coercion or unfairness.
✔ A lawyer helps clarify what can and cannot be included, ensuring all financial obligations are clearly outlined.
✔ If the contract is ever challenged in court, having a lawyer involved strengthens its enforceability.

💡 Tip: Each spouse should have their own lawyer to review and negotiate the contract to avoid conflicts of interest.

Steps to Properly Draft and Execute a Legally Enforceable Agreement

For a marriage contract to be valid and enforceable in Ontario, it must meet the following legal requirements:

1. The Contract Must Be in Writing

• Verbal agreements are not legally valid under Ontario law.
• The contract must be written, signed by both parties, and witnessed.

2. Full Financial Disclosure Must Be Provided

• Both spouses must disclose their assets, income, debts, and liabilities.
• If one spouse hides financial information, the contract could later be set aside by the court.

3. Each Spouse Should Obtain Independent Legal Advice (ILA)

• Each party must understand their rights and obligations before signing.
• Without legal advice, one spouse may later argue they did not fully understand the agreement, leading to potential legal challenges.

4. The Agreement Must Be Fair and Reasonable

• A marriage contract that unfairly favours one spouse or causes undue hardship may be struck down.
• Courts will assess whether the contract was reasonable at the time it was signed and remains fair over time.

5. The Contract Must Not Contain Unenforceable Clauses

• Child custody and child support provisions are not legally binding, as Ontario law prioritizes the child’s best interests at the time of separation.
• Unconscionable terms (e.g., leaving one spouse in financial ruin) may be challenged.

💡 Tip: Avoid rushing into a marriage contract right before the wedding. Courts may view last-minute contracts as coercive and may refuse to enforce them.

Reviewing and Updating the Contract as Circumstances Change

A marriage contract should not be considered a one-time agreement. As a couple’s financial and personal circumstances evolve, their contract may need revisions.

When Should a Marriage Contract Be Updated?

✔ Having children – The financial responsibilities of parenting may require modifying the agreement.
✔ Acquiring significant assets – If one spouse starts a business, receives an inheritance, or accumulates substantial wealth, the contract should reflect these changes.
✔ Changes in employment or financial status – If one spouse experiences a major increase or decrease in income, support obligations may need to be revisited.
✔ Relocation or change in jurisdiction – If the couple moves to another province or country, the contract may need to comply with new legal regulations.

Best Practices for Keeping a Marriage Contract Up to Date

• Schedule periodic reviews – Every few years, or after major life events, review the agreement with a family lawyer.
• Ensure both spouses agree to any changes – A contract cannot be altered unilaterally—both parties must sign off on updates.
• Document all updates properly – Any amendments should be written, signed, and witnessed, just like the original contract.

💡 Tip: Keeping the contract fair and relevant over time reduces the risk of legal disputes and increases its likelihood of being upheld in court.