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What should happen if people make an agreement without following the correct procedure?

A couple may reach an understanding about what will happen to their property if they separate. They may have relied on this understanding during a long relationship and structured their affairs in particular ways.

If, however, they have not made the agreement by following the correct procedure, the agreement will have no legal effect.

Ben and Grace
Ben and Grace live together. After talking, they decide that they will share all their major assets.

Grace will sell her house and with the money the couple will buy a bigger house in both their names.

In return Ben says he will add Grace’s name to all his savings accounts and term deposits at the bank.

The couple implement the agreement. They buy a new house with the sale money from Grace’s house. And Ben adds Grace’s name to the accounts and term deposits.

The couple later separate.

Grace discovers that Ben has a lot of money held in bank accounts overseas which he never told Grace about. Grace thinks this breaches their agreement because they were to share all their major assets.

She wants to enforce the agreement against Ben and take a share of Ben’s money.

Grace’s lawyer says that they did not make their agreement in the proper way. They did not write it down. Nor did they take legal advice when they made it.

Grace’s lawyer says it is unlikely the agreement will be binding.

Sometimes a partner can ask the court to order that the agreement is to apply even if it was not made in the correct way. But to make these orders, the court must be sure it will not affect the other partner unfairly. The court rarely uses this power.

What do you think?

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