Cohabitation contracts - overview

Cohabitation contracts enable partners who live together to regulate their affairs.

Consideration of cohabitation contracts in case law

In the past, cohabitation contracts were held to be void for reasons of public policy. Nowadays, the courts recognise that many couples choose to cohabit outside marriage or civil partnership. Such a contract is the best evidence of what was intended by the parties in the event of a subsequent breakdown in the relationship.

Terms and drafting

Drafting an agreement demands much care. To counter allegations of undue influence, it is important that:

The agreement should be formally recorded in writing to avoid disputes about the terms and to satisfy the requirements of the Law of Property Act 1925 where there is a declaration of property interest.

When a home is purchased, recording what was agreed in detail is very important. A clear definition of the beneficial interests in the agreement will usually determine the parties’ beneficial interests. Provision can be made for this to change if, for example, the parties have a child.

A deed should be used to avoid doubt about consideration for the agreement. Consideration is found by the exchange of mutual promises or by one party giving up something, eg a secure tenancy. The terms can be wide ranging to cover matters that are not legal obligations, eg, how much time the partners spend with each other. However, the court will only enforce legal obligations, generally under the laws of property, trusts and contract. An important inclusion would be a provision that each paragraph of the agreement is severable to ensure that any part of the agreement that is not enforceable does not void the entire agreement.

Financial provision

The range of financial claims available to a spouse are not available to a cohabitant . But an agreement to make payment of a capital sum or a periodic payment during the relationship, for example to meet the expense in running the home, or in the event that the relationship ends, can be included. A careful and clear definition is required for the amount to be paid, the method of calculation (ie a fixed amount of percentage of income), when payments end (eg on marriage), and what happens if, for example, one party has another child. An agreement providing for payment of maintenance whether during or after the relationship ends may succeed, as a contractual term, but may still be void for reasons of public policy.

Provision for children

Child maintenance payments may be agreed in the event of separation. This will not, however, prevent an application being made for child support. By written agreement, parents can ask the court to make an agreed order for child periodical payments, but this will only prevent the involvement of the Child Support Agency for one year.

An agreement for a parental responsibility agreement on the birth of any children or defining where the child lives after separation is not strictly enforceable, but may be very relevant if there is a subsequent dispute.

Variation

Parties are always able to vary their agreement. Any variation should similarly be recorded in writing.