Validity of Cohabitation or “Living Together” Contracts

Validity of Cohabitation or “Living Together” Contracts

Today, more and more couples are living together outside of marriage.  2015 data from the Pew Research Center found that while 87 percent of children lived in a home with married parents in the 1960s, only about 61 percent do so today.

The problem with cohabitation like that is that the law has not developed to protect these couples. The legal system has historically preferred marriage and avoided giving recognition to other arrangements. For that reason, a long-time couple that lives together for many years will usually be treated by the law as though they were just roommates. 

The case of Watts v. Watts

To get a sense of how this works, consider the 1987 Wisconsin case of Watts v. Watts. In that case, a couple lived together for 12 years, had two children together, and for the most part acted as though they were husband and wife despite never actually marrying. When the relationship ended, Ms. Watts went to court to try and get the couple’s property divided just like a divorcing couple.  The Wisconsin Supreme Court said she could not use divorce laws to her benefit, because she was never married.

In many states, that would be the end of the analysis and Ms. Watts would have been out of legal options.  The Wisconsin Court decided to help her out, however, and said that Watts was unjustly enriched by the cohabitation and therefore should have to share the assets.  In a sense, the Court created a divorce-like option for non-married couples.  

Living together contracts

Many couples have tried to do a similar thing by using cohabitation agreements

, also called “living together contracts,” to lay the groundwork for their non-marital relationship.  A cohabitation agreement tries to lay out the rights and responsibilities of each partner if the couple breaks up.  These agreements were generally banned under contract law before 1970, because the contracts were deemed to be based on “meretricious consideration.”  

What that means is courts saw living together contracts as one partner (usually a woman) trading sex in exchange for financial support from the other partner (usually a man).  In other words, cohabitation agreements were seen as prostitution.  

The case of Marvin v. Marvin

In 1976 that was changed by a California Supreme Court case called Marvin v. Marvin. In that case, Ms. Marvin claimed that she made an oral contract with Mr. Marvin that she would provide homemaking services in exchange for his financial support.  She claimed to have given up a lucrative career to do so, but when they broke up after six years he intended to leave her with nothing.

The Court stepped in and said that it would honor those types of agreements involving cohabiting couples, so long as the agreements were not based on sexual services.  Since that time, more than thirty states have followed California’s lead and provided some protection for cohabiting couples based on contract principles.  

Oral contracts

Every state deals with living together contracts differently, but there are a few steps couples can take to make sure their agreements have the best chance of being valid.  First, the contract should be in writing and signed by both partners. Many states will refuse to respect oral contracts at all, and even if states do honor oral contracts they can be very hard to prove.

In fact, Ms. Marvin eventually lost her case because she could never prove that she actually had a valid contract.  Second, the contract should clearly lay out the current financial conditions of each partner and then how the assets should be divided up later.  Third, the contract should include a severability clause so that the whole agreement is not deemed invalid if any one part is.  Finally, each partner should consult with their own attorney to ensure fairness.  Courts will be quick to strike down an unfair contract.

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