VOLUME 10, ISSUE 2: STUDENT SPOTLIGHT
Contracting for a Breakup: The Importance of Cohabitation Agreements That Include an Alternative Dispute Resolution Clause
The Ohio State University Moritz College of Law
Class of 2012
Cohabitation is a phenomenon that is becoming more popular each year.1 Two people meet, fall in love, and move in together. If marriage follows, it does not come until later. In this revised fairytale, life seems perfect—the couple is in love and the thought of breaking up never arises. When someone is living with the person he or she loves and things are going great, no one wants or usually even thinks to create an agreement discussing the logistics of a potential future break up or even death. Planning a breakup may seem like a ridiculous concept, but unfortunately, it is necessary. 2
Based on the merger of assets and possessions, joint purchases, and shared bills and payments, cohabitation agreements are necessary; this agreement must include an alternative dispute resolution clause so that issues and disputes can be appropriately handled outside of court.3 Upon dissolution, if there is no agreement in place and the couple cannot reach an agreement to mediate or arbitrate the dispute, litigation is likely to be the only remaining venue left to resolve the disputes.4 Furthermore, the absence of cohabitation agreements amongst cohabiting couples results in litigation in nearly every instance where the couple owns property.5
A cohabitation agreement sets forth the rights and responsibilities of the parties if the relationship dissolves.6 Cohabitation agreements allow the parties to ensure that their interests remain protected based on their own terms if a breakup occurs, giving the parties piece of mind should the relationship dissolve. 7
The inclusion of an alternative dispute resolution (ADR) clause serves multiple purposes in the context of cohabitation.8 First, ADR provides reason in a situation that is otherwise emotionally charged.9 Additionally, ADR can ensure that the dispute is not made public if that is the parties’ intent, because ADR allows for requirements of privacy and confidentiality.10 Adjudication cannot guarantee the same privacy and confidentiality.11 ADR will eliminate much of the uncertainty associated with an uncertain situation.12 Also, there is a lack of case law on the division of property and assets resulting from cohabitation and therefore there is a lack of precedent in this area of the law, causing uncertainty.13 Furthermore, since this is an emerging area of the law, courts may decide to proceed with caution and therefore it is difficult to predict how the court is going to rule on cohabitation disputes.14Ultimately, ADR is preferential to litigation in circumstances where a cohabiting couple breakup.
ADR, rather than divorce law, is the proper approach to handling cohabitation disputes. Although divorce law and the dissolution of the cohabitation relationship share some similarities, their differences show that cohabitation cannot be handled appropriately in the divorce law framework. A cohabitation agreement containing an ADR clause provides the appropriate relief to the cohabiting couple when dealing with the dissolution of their relationship.
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Posted in: Volume 10, Issue 2
- Rose M. Kreider, Increase in Opposite-Sex Cohabitating Couples from 2009 to 2010 in the Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS) (U.S. Bureau of Census 2010), available athttp://www.census.gov/population/www/socdemo/Inc-Opp-sex-2009-to-2010.pdf (this working paper provides statistical analysis based on data accumulated by the Census Bureau showing that there has been a 13% rise in the cohabitation of non-married couples between 2009 and 2010).
- See generally RALPH WARNER, TONI IHARA & FREDERICK HERTZ, LIVING TOGETHER: A LEGAL GUIDE FOR UNMARRIED COUPLES (14th ed. 2008) (throughout this guide the authors explain the importance of the creation of a living together agreement for couples who choose to cohabitate with one another without getting married since no legal rights attach to protect the individuals who choose this type of arrangement); Helen W. Gunnarsson, What to Do When There’s No “I Do,”94 ILL. B.J. 292, 295 (2006) (“Once you start acting like a partnership, you need to talk about a cohabitation agreement. Under no circumstances should you buy property together without an agreement.”).
- See id., at 22 (Without an alternative dispute resolution clause, if a dispute arises upon the dissolution of the relationship, the parties are forced to handle the dispute in court and will thus have to rely on the court to determine the outcome. Litigation becomes a last resort for many couples who will not agree to have an alternative dispute resolution clause in their agreement, or who will not agree to use such methods to settle their disputes. This tends to occur when parties have money, or when one of the parties has more at stake.).
- Id. at 187.
- Frederick C. Hertz, When Legal Protections are Few . . . Breaking Up is Hard to Do, 20 FAM. ADVOC. 12, 17 (1997).
- See Wendy S. Goffe, Preparing Effective Cohabitation Agreements for Unmarried Couples, 34 EST. PLAN. 7 (2007) (a cohabitation agreement “contains a roadmap for cohabitants who plan to live and share their lives together”).
- See generally Vincent Di Lorenzo & Clifford R. Ennico, Cohabitation Agreements, Basic Legal Transactions, § 42A:2 (2008) (“a ‘cohabitation agreement’ may be the only legal means to clarify their rights and responsibilities in the relationship”); Gunnarsson, supra note 3, at 294–95 (An unmarried couple lacks rights under the law but the formation of a cohabitation agreement is a valid contract that entitles the couple to the rights and responsibilities specified in the agreement. Without a cohabitation agreement, it is difficult to establish the existence of rights arising out of the relationship.).
- WARNER, supra note 3, at 184–87 (There are a variety of different alternative dispute resolution techniques that cohabiting couples may useful depending on the circumstances. Such techniques include informal negotiation with a third party, mediation, and arbitration.).
- See generally Marsha Garrison, Nonmarital Cohabitation: Social Revolution and Legal Regulation, 42 FAM. L.Q. 309 (2008).
- See generally PREMARITAL AND MARITAL CONTRACTS: A LAWYER’S GUIDE TO DRAFTING AND NEGOTIATING ENFORCEABLE MARITAL AND COHABITATION AGREEMENTS (Edward L. Winer & Lewis Becker eds., 1993).
- TONI IHARA & RALPH WARNER, THE LIVING TOGETHER KIT: A LEGAL GUIDE FOR UNMARRIED COUPLES, 5/20–21 (8th ed. 1997).
- WARNER, supra note 3, at 11.
- William H. Danne, Jr., Annotation, “Palimony” Actions for Support Following Termination of Nonmarital Relationships, 21 A.L.R. 351, § 4, §§ 14–27 (2007).
- Garrison, supra note 11; IHARA, supra note 13, at 5/2 (“Of all these reasons to write out your agreement, avoiding a court fight is probably the most important.”).
- See generally, Howard O. Hunter, Agreements Between Unmarried Cohabitants, MODERN L. CONT. § 24:10 (2010).