Pennsylvania courts have long held that post-marital agreements are contracts governed by principles of contract law, and it is presumed that adults entering into marriage contracts are doing so without duress, fraud or misrepresentation. Furthermore, marital agreements are enforceable so long as they have not been signed under duress, there is full and fair financial disclosure or proper waiver thereof, and both signing adults understand the contract.
Was Post-Marital Agreement Signed Under Duress?
In Pennsylvania, a post-marital agreement is invalid and unenforceable if the agreement is signed under duress. Pennsylvania law defines duress as “that degree of restraint or danger, either actually inflicted or threatened and impending, which is sufficient in severity or apprehension to overcome the mind of the person of ordinary firmness.” Duress exists only where one party uses force or threatens to use force, to physically harm the other as a result of failing to sign an agreement.
Duress does not include the stress and anxiety resulting from divorce proceedings. In addition, there is no duress when one party is free to contact and review the agreement with their counsel prior to signing the agreement.
Post-Marital Agreement Must Provide Full and Fair Financial Disclosure
A post-marital agreement must provide full and fair financial disclosure to be valid and enforceable under Pennsylvania law. The disclosure “need not be exact as long as it is full and fair.”
Spouses may waive the requirement of full and fair disclosure in entering into an agreement. In order to be valid, the waiver must be made voluntarily, in writing, and with the absence of fraud, misrepresentation, or duress. If the parties choose to waive the requirement of full and fair disclosure, then the parties are acknowledging that the other has not disclosed his or her financial situation.
Pennsylvania Residents Free to Enter Contract With or Without Attorney Consult
Under Pennsylvania law, all adult individuals, with capacity, are free to enter into contracts without consulting counsel. The court has said that imposing such a requirement would interfere with the parties’ freedom to enter into a contract. Therefore, an agreement may be valid even if a party did not review the agreement with counsel prior to signing it.
The Pennsylvania Supreme Court has made clear that courts are not permitted to examine the reasonableness of a marital agreement. The contracting adults are bound by their agreements whether or not they have read and fully understood the agreement. Then, if the parties viewed the agreement as reasonable when it was signed, they cannot later say it is unreasonable.
Courts Determine Mental Capacity When Signing a Contract
Under Pennsylvania law, an individual has the right to enter into a contract when he or she has “sufficient intelligence to comprehend the nature and character of the contract.” In Pennsylvania, the courts presume that all adults are mentally competent to contract.
In cases where it is alleged that an adult did not have the capacity to sign an agreement, then the individual alleging incapacity must prove that he or she was not of sound mind at the “very moment” the contract was signed. Courts determine the mental capacity of an individual by reviewing the individual’s spoken words and conduct and the observations of the people present during the signing of the contract.
There are numerous examples of the Pennsylvania courts’ ruling on mental capacity.
For example, in one matter, the Pennsylvania Supreme Court denied a father’s request to set aside gifts he made to his children based on his alleged incapacity. The father was in a psychiatric hospital several times before and after he made the gifts, and at one point he was even declared incompetent. Despite these facts, the court found the father had the capacity to make the gifts. The attorney who established the gifts and who had contact with the father on the day in question testified that the father knew and understood exactly what he was doing that day. In addition, the father’s psychiatrist testified that he had the mental capacity during this time and it was clear that he was able to operate his business and make decisions.
In another matter, the Pennsylvania Superior Court held the plaintiff had the capacity to sign a release even though she suffered from impaired memory, irritability, and a decreased ability to concentrate following a car accident. Specifically, the court found the plaintiff had the capacity to enter into the contract because there was no evidence presented that she did not understand the release when she signed it. The court also relied on the plaintiff’s own testimony that she understood she was signing the release when she signed it, required no persuasion to sign, and cashed the check she received as a result of her signing. The court rejected testimony from medical doctors who stated the plaintiff did not understand the release before signing because the doctors did not examine her around the time of the contract signing. Therefore, the court found the plaintiff had the capacity to execute the release.
In a third matter, the Pennsylvania Supreme Court found that a father had the capacity to execute a retirement application even though he was an alcoholic, was under severe distress as a result of his wife’s terminal cancer, and was seen talking to his dead father before and after he signed and submitted the application. The court found the father had capacity to enter into the contract when he submitted the application because the retirement official who met with and observed the father that day testified as to the father’s understanding of the agreement.
Under Pennsylvania law, an individual has the capacity to enter into a contract when he or she has “sufficient intelligence to comprehend the nature and character of the contract.” If a party wants to refute the mental capacity of the signing party, they need to bring forth evidence that the signing party was not mentally competent at the moment the agreement was signed.
The divorce and family law attorneys of Shemtob Draganosky Taylor Stein, PC can guide you through all of your divorce matters including any marital agreement or contract. Call our family lawyers in Montgomery County at (215) 544-3974 for a confidential discussion.