Xydhias v Xydhias: What is a Xydhias Agreement?

If you and your spouse have come to an agreement as to how your financial affairs should be sorted upon your divorce, it is advisable to have this formalised in a consent order. However, if your spouse seeks to depart from the agreement you had reached, your agreement may still be binding as per the case of an Xydhias v Xydhias.

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The case of Xydhias v Xydhias

Xydhias v Xydhias established the principle that when parties have come to an informal agreement concerning their finances upon divorce, they may be bound by the agreement before it is enshrined in a court order. Such agreements are now called an Xydhias agreement.

The details of the case are rather immaterial, but for the fact that during the course of negotiations, the parties concluded a draft agreement, which left two minor issues outstanding. Following this negotiation, the wife’s lawyers wrote to the court asking them to vacate the final hearing and list the case for a hearing dealing simply with the drafting of an order. The husband then announced, however, that he would be fighting the case and withdrew all existing offers. The wife applied to the court for him to “show cause” why he should not be bound by the agreement.

The husband argued that normal contractual principles should apply, and that an agreement should only be considered binding once all details have been finalised.

The court disagreed with this approach, holding that family law negotiations do not give rise to enforceable contracts and so the principles of contract law do not apply. The court concluded that, in the interests of keeping the court list free of unnecessary hearings, parties should be held to deals if they have substantively agreed and the only outstanding points are either trivial or mechanics.

When will an agreement become binding as per Xydhias?

Ultimately, the courts have wide discretion to judge whether the parties’ negotiations have resulted in an agreement which should be enforced as per Xydhias.

If the judge determines that the substantive issues were agreed upon by the parties willingly, with an understanding of the resulting consequences, it is likely that they will determine that an Xydhias agreement was reached and should therefore be binding.

In deciding this, the court will look at the specific facts of the case, considering whether the parties had sought legal advice, the actions they took, and the actions of any legal representatives.

For example, a party’s solicitors writing to the court to cancel a hearing, on the basis that an agreement has been reached (as what happened in Xydhias) will generally be considered strong evidence that an agreement was concluded and should be given effect.

Letters exchanged between the parties or their solicitors will also be strong evidence, as will a signed heads of agreement (a document detailing a settlement agreed between the parties in the course of their negotiations before an order is made).