NOTE: THIS IS NOT LEGAL ADVICE

A while ago I wrote about the requirements of entering a valid domestic contract. (You can read it here.)

Today I want to talk about what you need to set aside, that is, to cancel an otherwise valid domestic contract.

Domestic contracts, like all other contracts, are not exactly written in stone. To cancel a domestic contract, the parties can simply enter into a new contract and agree to end the old.

However, this is often not easy, especially when the relationship has turned sour, and the spouses are at each other’s throats.

Therefore, under Family Law Act, the legislation provides a few conditions in which an otherwise valid domestic contract may be set aside by the courts. In plain English, it means if:

• a spouse did not receive independent legal advice;
• the other side has hidden assets from the spouse, or misstated the value of the assets;
• the other side has threatened not to remove a religious barrier preventing the spouse from freely remarrying within the religion;
• does not have the capacity to enter into contract, or enters into the contract under pressure;
• the contract is otherwise void or voidable according to the law of contracts;

then the courts may set aside the contracts in question.

On the contrary, the courts are reluctant to set aside a domestic contract if the parties are:

• are sophisticated (e.g. being lawyers)
• receive independent legal advice regarding the contract
• enter into the contract under their free will
• do not threaten religious barriers to remarriage.

Finally, I wish to stress the importance of obtaining legal advice if you wish to apply to set aside a domestic contract. The courts are reluctant to do so without good reasons in law. These reasons must be properly drafted and presented to the court. You will save considerable effort and energy with the assistance of a competent counsel.