As is true of all contracts, prenuptial and postnuptial agreements require several ingredients for success. All parties should negotiate with good faith, and endeavor to live up to the promises they make in the agreement, as opposed to assuming that, if they fall short of the agreement’s terms, their attorney simply can get them out of it by getting the contract invalidated. If you are considering a postnuptial agreement, make sure that the terms you empower your Maryland family law attorney to negotiate are ones that you can live with… and live up to.
That background brings us to an interesting recent case from here in Montgomery County that involved a postnuptial agreement.
The wife was an account executive for a catering company. The husband was a wealth management advisor and wasn’t always faithful to his spouse. The wife discovered one of the husband’s affairs in 2014 and the couple separated. They eventually worked toward reconciliation, but the wife only agreed to continue the marriage if the husband signed a postnuptial agreement.
The wife’s legal team proposed a version of the agreement that called for the husband to pay $5 million if he again “engaged in inappropriate sexual activity.” The husband told his legal team to increase the lump-sum payment to $7 million as a “showing of good faith.” Against the advice of counsel, the husband signed the revised agreement and the marriage resumed.
That lasted a little more than three years. In late 2018, the husband took a new paramour. The wife discovered the affair in the spring of 2019 and sued for divorce. The trial court convened a three-day trial after which it entered a judgment of absolute divorce that incorporated the postnuptial agreement and the $7 million payment.
The husband’s legal team argued that the postnuptial agreement wasn’t enforceable because it lacked “consideration,” which is a required component of any valid contract. Consideration can be any sort of benefit a party receives, including benefits derived from the other party’s actions or refraining from taking action. In this case, the postnuptial agreement made it clear that, in exchange for the husband entering the contract, the wife agreed to “continue to work on the marriage” and forego pursuing her legal rights that would otherwise be available, such as a divorce on the ground of adultery.
A Lack of Meaningful Choice is Crucial to an Unconscionability Claim
The appeals court also rejected the husband’s argument that the agreement was unconscionable. Maryland courts have, in the past, explained that an “unconscionable contract involves extreme unfairness, ‘made evident by (1) one party’s lack of meaningful choice, and (2) contractual terms that unreasonably favor the other party.'”
Note the inclusion of the word and. Just because you have proof that an agreement is heavily slanted toward one party that, by itself, is not proof of unconscionability. Without proof of a lack of a meaningful choice, it’s just proof that you made a very bad deal.
In the postnuptial agreement case, the husband had the opportunity to consult counsel, did consult counsel, then not only proceeded with the agreement but made a counteroffer that slanted the terms even more steeply in favor of the wife. That’s not unconscionability; it’s just bad decision-making.
Whether you’re negotiating a prenuptial agreement or a postnuptial agreement, it pays to have thoughtful counsel from an experienced lawyer (and then to listen to your lawyer!) For advice upon which you can confidently rely in your prenuptial or postnuptial agreement matter, count on the knowledgeable Maryland family law attorneys at Anthony A. Fatemi, LLC. To learn more, contact us at 888-519-2801 or via our online form.