Formalities Required for Domestic Contracts
The Family Law Act allows couples to enter into domestic contracts governing what will happen in the event of a future breakdown in the relationship. In section 55 of the Act, it stipulates that any domestic contract must be in writing, signed by the parties, and witnessed.
In Gallacher v. Friesen, the Ontario Court of Appeal considered whether a domestic contract was unenforceable if the signature of one of the parties had not been witnessed according to the statutory requirements imposed by section 55. One of the parties had her signature witnessed, but the other party- the one who sought to have the domestic contract set aside – did not.
The agreement at issue provided that Mr. Gallacher would not acquire any interest in the home in which they both resided, as Ms. Friesen was the sole owner. Because the parties were not married, but living common law for 5 years, Mr. Gallacher brought his claim for an interest in the home on the basis of constructive trust as opposed to an equalization of net family property.
The court found that the requirements imposed by section 55 may be relaxed in situations where the signatures on the agreement are, in fact, those of the contracting parties, neither party appears to have been pressured into signing the agreement, and the terms of the agreement itself are reasonable,
On the facts of the case, the court concluded the domestic contract was enforceable, notwithstanding that it didn’t comply with the formal requirements of the Family Law Act, since both parties had received independent legal advice, both were sophisticated and educated, they had made full financial disclosure to each other, and there was no undue duress or vulnerability on the part of either of them.