Reconciliation Contracts Explained

Before committing to the finality of a divorce, couples experiencing marital difficulties may wish to consider a reconciliation contract as a means of trying to get the marriage back on track. While more prevalent in the United States than in the United Kingdom, the practice is steadily becoming more common here as well. This guide explains what exactly a reconciliation contract is, the advantages of entering into one and the legal implications of doing so.

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What is a reconciliation contract?

A reconciliation contract is a post-nuptial agreement between the two parties already involved in or considering divorce to press pause on those proceedings and give their marriage one more chance.

It will often set out commitments to which one or both parties pledge to adhere in order to save the marriage, such as curbing antisocial, addictive or destructive habits and behaviour. It will also include the financial terms of the split if the reconciliation attempt fails and the divorce goes ahead, with failure to adhere to the aforementioned commitments a trigger in bringing about such a scenario.

How does a reconciliation contract differ from a traditional post-nuptial agreement?

A reconciliation contract’s specific purpose is to help give the marriage another chance and the two parties the opportunity to reconcile their differences before they divorce.

This differs from traditional post-nuptial agreements, which are typically entered into by a married couple who are not considering divorce at that time, but wish to be prudent by agreeing how their money and assets would be divided if they were to separate in the future.

A traditional post-nuptial agreement might be considered if, for example, one spouse came into money from an inheritance, or a prenuptial agreement couldn’t be finalised in time prior to marriage, or if there has been some kind of betrayal in the marriage and one partner is seeking to demonstrate their commitment.

A reconciliation agreement is created in order to allow both parties to put down in writing how they will attempt to modify their behaviour, attitude or habits in order to save the marriage. Failing that, the agreement can then provide clarification on how financial assets will be divided in the event of a divorce.

Where did reconciliation contracts originate?

Reconciliation contracts first became popular in the United States around ten years ago as a way for unhappy couples to give their marriage one last chance before committing to the expense, emotional stress and, of course, finality of a divorce.

They are now a fairly widespread practice in other parts of the world, including Canada, India and Israel, and have slowly been growing in popularity in Britain in recent years.

Are reconciliation contracts legally binding?

As with all other kinds of pre-nuptial and post-nuptial agreements, reconciliation contracts are not automatically binding and can be challenged by either spouse. However, the courts are now more likely than ever to uphold a contract, especially after the landmark case of Radmacher v Granatino in 2010 (see the section below).

So, whilst a pre- or post-nuptial agreement between the couple will not be automatically enforced by the court and the specifics of the divorce will always be taken into account, the court is more likely to enforce the agreement than not, assuming the agreement was originally entered into by following general terms of fairness.

Occasions on which a court may ignore a reconciliation contract include where it was signed under duress or coercion, where one or both parties did not provide a full and frank disclosure of their assets and circumstances prior to its signing, where the court deems the terms are not fair to both parties or where one or both parties did not have access to trained legal counsel before signing.

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What is the Radmacher v Granatino case?

Radmacher v Granatino was a case brought before the Supreme Court in 2010 which ultimately upheld the arrangements laid out in a pre-nuptial agreement signed by the two parties prior to their marriage.

The wife (Radmacher) was German and the husband (Granatino) French and in an attempt to protect her family wealth, the prenuptial agreement was signed in Germany on the instigation of Radmacher and her family. In Germany, such agreements can be automatically enforced; in the UK, where the couple spent the majority of their married life, they cannot. As a result, when the marriage fell apart and Granatino applied for a financial settlement, he was awarded £5.6 million – a significant figure that was not agreed in the pre-nuptial agreement.

Radmacher subsequently contested the decision and her appeal was upheld by the Court of Appeal, which deemed that the High Court had not attributed sufficient significance to the agreement. Granatino appealed to the Supreme Court to overturn Radmacher’s appeal, but his claim was dismissed by a count of eight to one. The President of the Supreme Court, Lord Phillips, gave the following judgement of the case:

“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.”

As such it represents a landmark ruling in the field of pre- and post-nuptial agreements, including reconciliation agreements, as it provides significant precedent for other parties looking to enter into or uphold one. Today it remains the generally accepted stance of the law with regards to pre- and post-nuptial agreements.

What should be included in a reconciliation contract?

A reconciliation agreement should include specific commitments and pledges which one or both parties in the marriage promise to adhere to in order to improve relations. This could be refraining from addictive habits or behaviours, ceasing adulterous relationships or simply spending more time with the other party in the marriage.

The agreement is entered into under the proviso that should the aforementioned conditions not be met, divorce proceedings will go ahead.

For this reason, it’s imperative that the reconciliation contract contains details regarding the financial arrangements and conditions placed upon the couple in the event of a divorce. This could include such considerations as the division of property, pension pots and all other assets, as well as childcare arrangements if there are children present in the family.

Including as much detail as possible in the reconciliation contract will facilitate divorce proceedings at a later date, should the occasion arise.

What are the advantages of a reconciliation contract?

A reconciliation contract can be beneficial in that it can allow a couple to work out their problems before resorting to the finality of divorce. It can provide emotional and financial security to both parties by letting them know where they stand and clearly delineating what each needs to undertake in order to make the marriage work.

Divorces can be incredibly painful and extremely expensive, so a reconciliation contract can provide the couple with a last chance to avoid such unpleasantness.

They can also be instrumental in avoiding much of the acrimony and difficulties of a divorce. By negotiating and finalising the financial terms of the split when the couple are still ostensibly trying to make things work, they can avoid a nightmare scenario whereby relations have deteriorated to the point that the two parties are no longer speaking or refuse to agree on certain conditions and arrangements.

What are the disadvantages of a reconciliation contract?

While reconciliation contracts are generally a good way to afford a couple the opportunity to repair their marriage, there are occasions where one party may try to use them as a way to overcomplicate or extend divorce proceedings, either by postponing them indefinitely or allowing the party to gain some leverage in future negotiations. As such, a reconciliation agreement should only be considered if there is a genuine desire to save the marriage on both sides.

Furthermore, while not as expensive as a divorce, reconciliation contracts can add extra expense to the costs of a divorce if things come to that, as much of the same processes will need to be repeated during divorce.

When can a reconciliation contract be used?

There is no specific time during the breakdown of a marriage in which reconciliation contracts can be created. It could be that the couple wishes to protect themselves and their assets against any future developments at the first sign of trouble in a marriage, or it could be used as a method of giving the marriage a second chance after a period of separation.

It can also be used as a last resort once divorce proceedings are already underway in order to give the marriage a final chance to survive.

The future of reconciliation contracts in the UK

Reconciliation contracts are still fairly rare in the UK, but they are slowly growing in popularity. Especially in the wake of the Radmacher v Granatino case, there is more legal weight being attributed to contracts and agreements such as these, meaning there is no reason why they should not be more commonly upheld in courtrooms around the country.

As such, it’s to be expected that reconciliation contracts will become increasingly popular in the UK in the years ahead.

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