Historically, contracts which were seen by the courts and legislators to enforce ‘sexual immorality’ such as pre-marital relations and those which were seen to undermine the institution of marriage have been considered to be against public policy. Now with various rights entrenched in the Constitution coupled with the commonality of cohabitation, the courts are likely to uphold these contracts which are known as cohabitation agreements.
Many heterosexual couples who live together without getting married often believe that they are living as if they are married, without the legal strings and obligations that accompany marriage. It is advisable that such couples enter into cohabitation agreements with their partners. A cohabitation agreement operates in a similar manner to an ante-nuptial contract (“ANC”) in that it protects both parties upon dissolution of the relationship by death or break-up.
Cohabitation agreements are more complex than an ANC’s, as they are not governed extensively by statute and they involve other aspects other than assets for example finances and day-to-day expenditure . Such agreements amount to arrangements between partners that somewhat resemble a commercial partnership agreement. Their main objective is to govern the relationship of the parties with emphasis on consequences upon dissolution where most agreements are crucial.
Upon reading the case below, which has been very briefly summarised, one understands the risks of cohabiting without an agreement. In the Supreme Court of Appeal (‘SCA’) case of Butters v Mncora (181/11)[2012] ZASCA 29 the appellant and respondent, although never marrying, lived together as husband and wife for almost 20 years. The appellant owned a business and the respondent maintained the home whilst caring for the children of both parties. After the relationship ended, the respondent instituted action against the appellant claiming half his assets on the basis that their relationship amounted to a tacit universal partnership. The High Court ruled in favour of the respondent and awarded her 30% of the appellant’s assets. On appeal, the SCA held that although cohabitation does not give rise to special legal consequences, a cohabitee can invoke legal remedies based on the law of partnership. The court looked at the three main elements of a partnership, the first that each of the parties contribute something to the partnership whether it be money, labour or skill. The second is that the partnership should be carried on for the joint benefit of both parties. The third is that the object of the partnership should be to benefit of both parties. The court then held that these three elements are applicable beyond commercial dealings. The appellant argued that the position of cohabitees should not be equated with spouses in a marriage in community of property. The SCA dismissed the appeal and agreed that the relationship amounted to a tacit universal partnership.
A cohabitation agreement should stipulate the intention of the parties with regard to a universal partnership and cover aspects such as inter alia excluded property, joint property and the division thereof, duty of good faith and the exclusion or inclusion of post-relationship maintenance. It is also worthwhile including a severance clause in the contract which will protect the whole agreement from being void should any of the material clauses contradict any statute or case law. This is especially necessary in an area of law such as this which is prone to development and change over the years.
It is noteworthy that an agreement can be entered into at any time during the relationship and may contain provision for its nullification should the parties get married. Furthermore cohabitation agreements, unlike ANC’s are not lodged at the deeds office.
Please note that all website content is subject to Hurwitz Higgs Attorneys' disclaimer and copyright which can be viewed at http://www.hurwitzhiggs.co.za/disclaimer/