Chioma Vanessa Okanu - University of Law
LEGAL DISPARITY ACROSS BORDERS: THE NEED FOR GLOBAL CONSISTENCY IN ENFORCING PRENUPTIAL AGREEMENT
In a time when marriage and partnerships are becoming increasingly global, the legal systems that oversee these unions frequently expose glaring differences among nations. An instance of this disparity in family law is in the enforcement of prenuptial agreements. Prenuptial agreements raise international difficulties since clients’ wealth and relationships will increasingly span multiple nations and jurisdictions as the world becomes interconnected. These contracts designed to regulate the affairs of spouses in the event of divorce, find themselves to varying degrees of enforceability. Ensuring the worldwide uniform enforcement of pre-nuptial agreements is crucial to address issues arising from legal differences and to ensure cross-border marital disputes are resolved fairly and with predictability. This essay addresses the issue of enforcing prenuptial agreements across various countries. It provides detailed information of the legal differences across jurisdictions, the challenges faced and the need for global consistency in enforcing prenuptial agreements.
A prenuptial (or pre-marital) agreement is one between the parties to an intended marriage/civil partnership which sets out how their assets will be divided in the event of a divorce or an end to the relationship. Prenuptial agreements can provide clarity during divorce proceedings, but the inconsistency in legal enforcement can also lead to confusion. The difference in foreign and domestic laws can make it difficult to prepare a document that will be fully effective across multiple jurisdictions. There are many variables in a states’ enforcement of prenuptial agreements. These include statutory framework, judicial attitudes and public policy considerations. Because of the range of variables, and the similarly broad range of state approaches to each, different states are unlikely to reach the same results in a particular case. Whether the state will respect and enforce a decision of another jurisdiction depends on certain factors. As the examples below demonstrate, prenuptial agreements generally are enforceable, in some states, it is not.
In England and Wales, the legal stance on prenuptial agreements has traditionally been cautious, with courts often deeming them unenforceable due to perceived conflicts with public policy. The Matrimonial Causes Act 1973 forms the legal backdrop, setting divorce standards and jurisdiction. Sections 25 and 34 are pivotal, governing court powers and rendering void any pre-marital agreement restricting financial arrangements. However, exceptions, as seen in the 2010 Radmacher case, illustrate a departure from this norm. English courts are gradually becoming more accepting of prenuptial agreements, evidenced by a growing prevalence in their adoption. Despite the potential for court rejection, the evolving stance, particularly post the Radmacher v. Granatino decision, suggests a changing landscape.
Recent cases further illuminate the nuanced approach of English courts. In S v H [2020], a prenuptial agreement signed overseas was deemed non-binding by English courts due to a lack of formal disclosure, absence of legal advice, and a hasty agreement just days before the wedding. The court, diverging from the agreement’s terms, ordered the wife to pay a lump sum to the husband. Similarly, in Collardeau-Fuchs v Fuchs [2022], an American prenuptial agreement was considered during an English divorce. The English courts, however, deemed it insufficient to meet the wife’s needs, leading to an award that differed from the American agreement.
These cases underscore the English courts’ willingness to consider foreign prenuptial agreements while highlighting the importance of fairness in their application. The judiciary evaluates such agreements meticulously, ensuring equitable outcomes for all parties involved. This approach reflects a departure from strict adherence to contractual terms, emphasizing the evolving nature of English law in adapting to international dynamics. However, despite this perceptible shift, the lack of a comprehensive legislative framework continues to leave certain aspects of the enforcement of prenuptial agreements open to judicial discretion.
Across Europe, the legal landscape regarding the enforcement of prenuptial agreements presents a mosaic of diverse approaches. While Germany, Spain, and Portugal recognize prenuptial agreements, France and Italy contend that they contravene public policy, particularly concerning maintenance. New EU regulations aim to standardize these divergent practices, underscoring the need for pan-European standards. However, until such standards are established, the outcome of enforcing prenuptial agreements remains uncertain in this patchwork of laws.
In France, a unique approach prevails, where a Notary, acting on behalf of both parties, is solely responsible for drafting the prenuptial contract. This stands in stark contrast to the Common Law system, where independent legal counsel for each party is a requisite for enforcement considerations. Furthermore, under the new EU regulation, compliance with formal requirements, as dictated by the ratifying country, is obligatory for an EU citizen party to the prenuptial agreement.
In Germany, marriage agreements are meticulously drafted and recorded by highly qualified civil law notaries, who hold a judge-like standing. Unlike English law, German practice rejects the concept of ’financial disclosure,’ deeming it contrary to the German emphasis on privacy. Once established, a German marriage agreement is binding, stipulating a strict separation of property with limited room for later amendments. Contrastingly, Code Civil countries such as France and Monaco impose statutory rules that prenuptial agreements cannot override. As previously mentioned, in Spain and Portugal, prenuptial agreements are enforceable, but Spain introduces a caveat that considers potential detriment to children or serious harm to one of the spouses.
In the United States, the enforcement of prenuptial agreements is subject to the multifaceted landscape of matrimonial law, which varies from state to state. This lack of uniformity poses challenges for couples seeking to enforce prenuptial agreements across different states, given the potential conflicts of laws. These challenges are further compounded when dealing with cross-border prenuptial agreements, introducing the application of foreign laws and multijurisdictional issues.
The prevailing approach in New York, a jurisdiction known for its robust stance on upholding prenuptial arrangements, is to enforce a foreign agreement if it is binding in the jurisdiction where it was executed. This reflects the modern consensus in the United States, where prenuptial agreements are generally recognized as valid contracts in a manner akin to other contractual arrangements. The development of this acknowledgment is clear in the shift from focusing on fairness in procedures and content to a more emphasis on enforceability.
In most U.S. states, prenuptial agreements are considered valid contracts, subject to certain requirements, including written form, signatures from both parties, absence of fraud or duress, and, in some states, court ratification. However, these agreements can be challenged, particularly concerning maintenance provisions, if deemed "unconscionable" at the time of entry or final divorce. The requirement for fair and reasonable disclosure of property or financial obligations further underscores the evolving nature of prenuptial agreement enforceability.
Notably, New York stands out as a desirable jurisdiction for upholding prenuptial arrangements, with specific statutes permitting agreements before and during marriage. Recent legal decisions, such as Gottlieb v. Gottlieb, emphasize the importance of understanding the contractual nature of prenuptial agreements, even if not inherently fair, if parties knowingly enter them and have legal advice. This nuanced approach in New York aligns with the broader trend in the United States, where consensual resolution through marital agreements is encouraged, reflecting a shift towards a contractual model in matrimonial law. In Australia, financial agreements, encompassing pre-nuptial and post-nuptial arrangements, are legally binding if they meet specific requirements. These include being in writing, signed by all parties, and each party receiving independent legal advice. The court can set aside agreements due to fraud or unconscionable conduct, impracticability, or significant changes related to the welfare of a child. Lack of full and frank disclosure may render an agreement unconscionable, justifying its invalidation. The court’s focus lies not in the agreement’s content but in the circumstances of its formation, ensuring fairness. In Canada, governed by the Divorce Act, allows for divorce after one year of separation or in cases of adultery or cruelty. While the Act doesn’t mandate pre-marital agreement compliance, it considers divorce proceedings and child custody provisions are evaluated based on the child’s best interests.
The Marriage Law of the People’s Republic of China permits divorce under various circumstances, including mutual consent, unfaithfulness, living separately, or domestic violence. Article 19 permits parties to contract pre-marital agreements regarding property acquired during and before marriage, emphasizing the need for written documentation. South Africa’s approach to prenuptial agreements is unique. Automatic inclusion in a complete community of property occurs upon marriage unless an antenuptial agreement is signed. Under the accrual system, estates’ growth differences determine claims. Opting out lets couples define terms if they don’t violate public policy. This flexible approach aligns with the principle of freedom of choice in marital property regimes.
Furthermore, cultural views and social stances regarding prenuptial agreements differ widely among various regions and nations. In certain cultures, prenuptial agreements are seen as a sensible and responsible approach to safeguard individual assets and clarify financial expectations. In other societies, prenuptial agreements might be perceived as a potential cause of tension or mistrust in a relationship. Societies with an individualistic orientation, such as the United States, underscore independence, self-sufficiency, and individual rights. In contrast, collectivist cultures like China prioritize family and community dedication over personal concerns. Consequently, in the U.S., prenuptial agreements are quite prevalent and socially accepted. They are viewed as a practical means for couples to safeguard personal assets in the event of divorce and to delineate financial roles and responsibilities within the relationship.
The challenges linked to enforcing prenuptial agreements across jurisdictions are diverse, necessitating a subtle understanding of legal complexities. Examining various perspectives on marriage and prenuptial agreements reveals potential problems that may arise in specific circumstances. Notably, when a marriage takes place in a jurisdiction allowing prenuptial agreements but relocates to one that does not enforce such agreements, the ensuing divorce may lead to intense litigation. The crucial decision on which legal system will govern both the divorce and the related prenuptial agreement proves to be more significant than commonly perceived.
Currently, the most formidable obstacle to an effective global prenuptial agreement is the issue of enforcement. The jurisdiction to decide on a prenuptial agreement is complex, involving considerations of residency, domicile, business conduct, nationality, and past affiliations of either spouse. The unpredictability of how a particular jurisdiction’s legal system will interpret and decide on a prenuptial agreement adds an additional layer of complexity during the drafting phase.
In the United States, enforcement challenges are evident in the varying approaches among states. Courts may recognize prenuptial agreements from other countries, but this recognition is contingent upon compliance with the public policy of the state seeking enforcement. For instance, the case of Stawski v. Stawski illustrates a New York court’s validation of a premarital agreement signed in Germany. Despite the plaintiff wife’s argument of not understanding the agreement, the court emphasized her voluntary signing and actions aligning with the agreement’s terms during the marriage.
However, challenges persist, as seen in the case of IPEKÇI v McConnell, where a New York court refused to uphold a prenuptial agreement seeking to apply New York law due to non-compliance with New York legal requirements. The husband’s lack of advice from counsel familiar with the governing law and jurisdiction further complicated the matter. Cross-jurisdictional conundrums, as exemplified in Brack v Brack, underscore the legal intricacies involved in the validity of prorogation clauses within prenuptial agreements.
Potential solutions to these challenges include recognizing that movement between domiciles can impact enforceability, emphasizing the importance of choice-of-law provisions and forums with significant contacts. Maintenance provisions are closely monitored by the court, requiring fairness and reasonableness at the time of making the contract and the entry of the final judgment.
In the case of Karg v. Kern, the enforcement of a German prenuptial agreement was denied, revealing the cautious approach taken when indications of fraud, coercion, or lack of understanding exist. The court’s decision highlighted the critical importance of transparency, fair representation, and understanding of legal terms in prenuptial agreements, regardless of the jurisdiction in which they are created.
In conclusion, navigating the complexities associated with enforcing prenuptial agreements across borders demands meticulous consideration. Enforcing these agreements remains a substantial challenge, requiring active cooperation from all countries to harmonise laws. However, harmonisation raises concerns about countries conceding their norms, challenging notions of autonomy. Despite the intricate obstacles and details inherent in each country’s legal landscape, promoting global consistency in enforcing prenuptial agreements is imperative.
Countries should commit to fairness, procedural predictability, and respect for individual autonomy, recognizing the diversity of legal traditions and cultural norms. Addressing these issues contributes to a more cohesive and equitable legal framework for prenuptial agreements, safeguarding individuals’ rights and fostering stability in international families.
If you’re considering or going through a divorce, click below for a free initial consultation with one of our expert divorce solicitors.
BOOK FREE CONSULTATION
Bibliography
-
Granatino v Radmacher [2010] UKSC 42
-
S v H [2020] EWFC B16
-
Collardeau-Fuchs v Fuchs [2022] EWFC 135
-
Young v Young [1993] 4 SCR 3,10
-
Stawski v Stawski, 843 N.Y.S. 2d 544 (2007)
-
IPEKÇI v McConnell [2019] EWFC 19
-
Brack v Brack [2018] EWCA Civ 2862
-
Karg v. Kern, 129 A.D.3d 620 [1st Dept 2015]
-
Matrimonial Causes Act 1973 (MCA 1973)
-
Divorce Act, R.S.C. 1985, c.3, 15.2(4)
-
The Marriage Law of the People’s Republic of China (promulgated by the Chairman of the Standing Comm. Nat’l People’s Cong, Sept. 10, 1980. effective Jan. 1, 1981)
-
Mark E. Haranzo, Brooke M. Elliot ’Cross Border Prenuptial Agreements’ (Holland & Knight, January 2021) accessed 24th January 2024
-
Lexis+ ’Pre-nuptial agreement’ (Overviews, LexisNavigator accessed 24th January 2024
-
Gail Frommer Brod, ’Premarital agreements and Gender Justice’ (1994) YJLF 6, 231.
