Shape Icon

Relationship agreements

6 April 2023 | Maddy Currie
relationship property

Recently, we posted a blog article about why or when you should get a contracting out agreement. But what details do you need to consider once you have decided to go ahead with a contracting out agreement? Here are some key details to be aware of.

Firstly, each party to a contracting out agreement needs to have independent legal advice before signing the agreement. One solicitor will typically draft the contracting out agreement based on instructions from their client. The other party will usually contact a different solicitor to get independent advice on this draft agreement before signing.

Once the draft Agreement has been finalised, each person will need their solicitor to witness their signature on the agreement, and that solicitor will also need to provide a certification that they explained the agreement to their client.

One of the biggest issues we see is clients wanting to sign the agreement without having received thorough legal advice to try and keep costs down.

It is easy to think that getting independent legal advice is just seeing any solicitor and having a 15-minute meeting to get the agreement signed without much discussion. Although this may save you legal fees initially, rubber stamping an agreement can have significant implications down the track, including the whole agreement potentially being set aside. It is critical to the validity of the agreement that each party receives thorough independent legal advice.

The requirements for independent legal advice for contracting out agreements involves the following:

  1.  The lawyer providing advice must be independent, meaning they have had no previous professional or personal relation with the party for whom they do not act (the other party to the agreement);
  2. The full implications of the document must be explained. This involves the lawyer:
  • understanding your background and situation,
  • reviewing the whole agreement,
  • explaining the whole agreement to you and also explaining the impact that the clauses or the agreement will have on you and your situation,
  • Explaining what rights are you waiving,
  • Explaining if you are benefiting from the agreement or are you giving up certain entitlements,
  • Explaining how will this agreement effect you in your current situation and how might it affect you in the future, and
  • Discussing what changes should be made to the agreement (if any).

A contracting out agreement should never be signed in the first meeting. The lawyer needs time to understand your background and situation in order to fully advise you. You also need time to consider and reflect on any issues or points brought to your attention. This takes time and does incur fees, but it is money well spent.

If a dispute arose relating to the agreement and there is not sufficient evidence that the parties received through independent legal advice then the contracting out agreement can be set aside by the Courts. If you are spending the money to get a contracting out agreement drafted to protect your interests and assets you are better to spend a little bit more and make it as robust as possible rather then saving a bit at the initial set up and potentially losing thousands in the future if a dispute arises.

At Godfreys law we pride ourselves on providing quality legal services to our clients and ensuring their interests are protected. If you are interested in drafting a contracting out agreement or require independent advice contact the team at Godfreys Law.

Maddy new with BG removed 6

Article by:

Maddy Currie


Maddy joined Godfreys in March 2022, wanting to work in a smaller firm to have the opportunity to advance her interests in Life Law and to gain experience in a variety of areas.

More about Maddy Arrow icon