Prenuptial Agreement: Legal Angle

Reading time: 8-10 minutes.

Marriage is something that binds two people in a bond of love, care, affection, and respect. It is one of the holiest bonds on earth since time immemorial and considered to be a sacrament. Even though different religions have their respective customs, rituals, and traditions of forming and nurturing this bond, one thing remains common amongst all—the need to protect and preserve the sanctity of marriage.

It is the sanctity of the bond created by a marriage that still makes divorce a taboo in the majority of the communities around the world. Being divorced means bringing shame to the family. It doesn’t matter if the married couple is not happy, comfortable, or satisfied in their relationship or that the relationship has become abusive. All that matters in the eyes of society is the preservation of marriage at any cost. And to top it off, we all are well aware that divorce proceedings are anything but quick, smooth, or cordial. The word that can describe them perfectly is ‘brutal’.

However, as people are getting more educated, aware, financially sound, and independent amidst the rising social standards, they have started looking for solutions that can help protect their interests when their marriage ends. One such solution favoured by them is that of prenuptial agreements. It has now become common for a couple to enter into such agreements that help them decide beforehand the division of their property and assets, joint or otherwise, and the amount of alimony among other things in case the marriage ends in divorce.

But, in a country like India, where marriage is still considered a sacrament rather than a contract, prenuptial agreements lack legal backing. They are often considered “opposed to public policy” for anticipating the possibility of a taboo like a divorce in advance.

The article throws light upon what these agreements are, their legal enforceability, use across the world, and whether they are opposed to public policy and have any legal backing.

What is ‘prenuptial agreement’?

A prenuptial agreement (or a prenup) is an agreement between a couple, before their marriage, to decide in advance how the division of their property and assets, joint or otherwise, if any accumulated during the marriage, would take place. This agreement also contains clauses that dictate who will pay who and how much of maintenance/alimony. A prenuptial agreement, thus, provides a road-map to the couple in the event of divorce. It helps them prepare for an unpredictable future by equipping them with means that would protect their interests. It helps with smooth and peaceful termination of their marriage by deciding their rights and obligations in advance.

A prenuptial agreement entered into with the mutual and free consent of the parties can guide the Courts of law during the divorce proceedings.

The agreement does not have a fixed legal format. Some of the clauses that can form a part of a prenup are:

  • Division of the joint property or assets of the couple
  • Maintenance rights of the wife
  • Alimony
  • Custody and maintenance of a child, if any
  • Savings
  • Insurance and Mediclaim
  • Gifts
  • Debts of the couple, individual and joint, if any

Prenuptial agreements are drafted to protect the interests of both the spouses in case of a divorce. They save time and often protect the hard-earned money of a spouse from an abusive partner. They also protect and prevent the splitting or selling off of family business. A prenup also protects the couple from spending a lot of time and money in Courts during divorce proceedings. It might be a difficult decision for many couples and yet it has now become the usual.

Prenuptial Agreements: Global scenario

No doubt that the prenuptial agreements lack legal recognition in India, but this is not the case with other countries. Prenups are legally enforceable under specific laws or generally by the Courts in many countries.

For instance, in the United States of America, prenuptial agreements are legally enforceable in all 50 states,

In Canada, prenuptial agreements are recognized as marriage contracts under section 52 of the Family Law Act, 1990. These marriage contracts cover the rights and obligations of both the spouses under marriage as well as in case of separation, annulment, or death. They may or may not deal with the custody of children. Under the Divorce Act, 1985, the agreements are taken into consideration while deciding on the child or spousal support during the divorce proceedings. However, as a general rule, the community property law of equitable distribution of assets is applicable in all Canadian provinces.

In Australia, these agreements are called “binding financial agreements” that gained recognition with the enactment of the Family Law Amendment Act in 2000.

Countries like Austria, France, Netherlands, Portugal being a party to the Hague Convention on the Law Applicable to Matrimonial Property Regimes, accord legal recognition to prenuptial agreements as the Convention specifically authorizes prenups.

In New Zealand, prenups are legally enforceable after the enactment of the Matrimonial Property Act, 1976.

Laws regarding it in India

In a country where the personal laws on marriage are built upon centuries-old customs and traditions and divorce is still a taboo, prenuptial agreements failed to have legal backing.

Prenuptial agreements are not recognized under the marriage laws in India. They find a specific mention only in Section 40 of the Divorce Act, 1869 (one of the few personal law codes that govern Christians). This section states that the District Court may look into “the existence of ante-nuptial or post-nuptial settlements” before deciding upon the dissolution of a marriage. The State of Goa, the only one with a Uniform Civil Code (on the lines of the Portuguese Civil Code, 1867), allows for prenuptial agreements under family law for property distributions. Under Muslim personal law, marriage is a civil contract between the spouses. The contract of marriage or nikahnama can bear clauses to protect the right of the woman and the children born out of the marriage. Though, the Muslim personal law bears no mention of prenuptial agreements.

From a broader perspective, the prenuptial agreements have legal recognition only under the provisions of the Indian Contract Act, 1872. Section 10 of the Act states that all agreements are contracts if they are made with the mutual and free consent of competent parties with a lawful consideration for a lawful object. Thus, if a prenuptial agreement is made with the mutual and free consent of both the spouses, i.e., none of the spouses is coerced, defrauded, unduly influenced, or misrepresented and there are a lawful consideration and a lawful object, then the prenuptial agreement can be legally enforced as a contract. Lawful consideration and object mean which are not unlawful, illegal, or opposed to public policy.

Critical analysis

The prenuptial agreements presuppose the possibility of termination of the marriage and aim to protect the rights and obligations of both the spouses if such a situation occurs. In a country like India where marriage is considered holy rather than a social contract, prenuptial agreements are often considered as opposed to public policy.

In Bai Fatima v Ali Mahomed Aiyab (1912 14 BOM. L.R 1178), the Bombay High Court held that any prior agreement that not only provides for but encourages future separation of spouses is against the public policy and thus, must be pronounced as void. On the other hand, in the case of Muhammad Muin-Ud-Din & Another v Musammat Jamal Fatima (1921 63 IND Cas 883), the Allahabad High Court faced the question of whether a prenuptial agreement was good in law and enforceable or opposed to public policy and void. The Court held that the circumstances of this case were different from the Bai Fatima case and that such an agreement was valid and enforceable.

The Jammu and Kashmir High Court in Jani v Mohd Khan (AIR 1970 J&K 154), held the prenuptial agreement that provided for certain conditions under which the wife could divorce the husband was opposed to public policy and thus non-enforceable.

The Indian judiciary has invalidated the prenuptial agreements on grounds of opposed to public policy when

  • The clauses of the agreement override the rights and obligations under the personal laws
  • The Court perceived the agreement to be encouraging future separation

Over the years, the judiciary has invalidated these agreements on the main ground of being opposed to public policy. However, it is very important to understand that with the changes in society, the meaning of public policy also changes. What was opposed to the public policy until the 1980s may not be so now. Chances are it might as well be in the favour of the public policy. For example, earlier, getting married to someone from the same caste or sub-caste was considered opposed to public policy but now it is fairly common. Entering into marriage brokerage contracts wherein a third party is paid for arranging the marriage is considered against the public policy. But it is well known that it is a norm to reward such a party with money or jewelry for brokering the marriage.

Therefore, it is important to review and revise the meaning of public policy in the light of today’s society. The laws must grow and develop according to the times. They cannot remain stagnant and have to be ever-changing and ever-growing otherwise they will be rendered arbitrary.

Some people feel that these agreements rob the marital bond of care and affection and rather render it a social contract. The spouses are governed by the pre-decided terms and conditions which convert them into mechanical beings with no emotions. In reality, these agreements push the spouses to discuss even the minutest details before getting married. They get the opportunity to bring forth all doubts, questions, and apprehensions that would have come in the future. It, thus, improves communication and makes for better bonds.

It is also noteworthy that when a person is well aware that even if his/her marriage ends up in a divorce, his/her assets are safe and secure as the division has been pre-decided, the person would want to invest more of his time, efforts and emotions into the relationship.

But a major problem which comes with the prenuptial agreements is that they cannot predict the future. What if the financial situation of one of the spouses or even both of them changes? What if today the wife is earning Rs. 30 lakhs per annum but at the time of divorce, her income falls to Rs. 10 lakhs or rises to Rs. 60 lakhs. The prenuptial agreements are not flexible and thus cannot accommodate such changes. In such situations, one of the parties is at a loss despite planning the course.

Conclusion

Judiciary in our country has a burden of more than 1.5 crores of pending cases. Divorce proceedings take an average of 6 years to conclude. In such a scenario, prenuptial agreements can play a momentous role. They can act as a guide for Courts during the brutal and gruelling divorce proceedings. They cannot only save the time of the Court but also of the couple in question. Moreover, it is pertinent to note that marriage is not just dissolved over disagreements; abuse, harassment, and violence are also some reasons behind the divorce. The prenuptial agreements can prove to be of great help in securing the future of the victim. In light of these points, these agreements deserve legal backing. The Ministry of Women and Child Development is pushing the Government to legally recognize these agreements.

But in a country like India, where divorce is still considered a taboo and always taken as the last resort after the failed attempts of the entire army of family and relatives to reunite the couple, prenuptial agreements will face a long and difficult battle. It might seem like planning the doom of marriage even before its commencement but there is no harm in preparing for an uncertain future. A prenuptial agreement does not guarantee a divorce but guarantees the protection of the rights of both the spouses in case of a divorce.

Author: Jhanvi Gupta from Symbiosis Law School, Pune.

Editor: Shalu Bhati  from Campus Law Centre, Faculty of Law, University of Delhi.

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