Can You Challenge or Set Aside a Cohabitation Agreement in Ontario?

Understanding Cohabitation Agreements in Ontario

Cohabitation agreements in Ontario are legally binding contracts made between two people who live together or plan to live together in a common-law relationship. Under Ontario’s Family Law Act, these agreements allow couples to define how their property, finances, and responsibilities will be managed during the relationship and if it comes to an end.

They are commonly used to:

• Outline property division rights, including real estate, investments, or jointly purchased assets.
• Set expectations around spousal support, helping avoid disputes later.
• Coordinate with estate planning, ensuring clarity for beneficiaries and family members.

The enforceability of a cohabitation agreement depends heavily on fairness and whether the parties followed the proper legal process. Courts in Ontario will not automatically uphold an agreement if it appears one-sided, rushed, or lacking in legal safeguards such as financial disclosure and independent legal advice.

Grounds for Challenging a Cohabitation Agreement

Although cohabitation agreements are generally enforceable in Ontario, there are several circumstances where a court may set aside or refuse to uphold the agreement. These challenges are evaluated under the Family Law Act and guided by fairness, transparency, and due process.

Duress or Undue Influence

If one party signed the agreement under pressure, threats, or emotional manipulation, a court may find the agreement invalid. For example, if a partner insisted on signing just before moving in or under the stress of a major life change, the court could view this as coercion rather than voluntary consent.

Lack of Financial Disclosure

Full and honest financial disclosure is a cornerstone of enforceability. If one party failed to disclose key assets, debts, or income at the time of signing, the agreement may be challenged. Hidden accounts, unreported property, or incomplete reporting of liabilities can give grounds for setting aside the agreement.

Unfairness or Unconscionability

An agreement that heavily favours one partner while creating significant hardship for the other may be deemed unconscionable. Ontario courts have the discretion to strike down or modify terms that appear grossly unfair, particularly if they would leave one partner financially vulnerable after separation.

Improper Legal Advice

For an agreement to carry weight in court, both partners should receive independent legal advice (ILA). If one or both parties signed without having their rights and obligations explained by a family lawyer, or if the advice provided was inadequate, the agreement may be open to challenge. Courts often require proof of ILA, such as a signed certificate from a lawyer, as evidence that both parties entered the agreement knowingly and voluntarily.

How Ontario Courts Review Challenges

When a cohabitation agreement is challenged, Ontario courts apply a careful, case-by-case review. The goal is to balance each partner’s freedom to make private contracts with the court’s duty to prevent exploitation and ensure fairness.

Fairness at Signing and Enforcement

Courts look at whether the agreement was fair at the time it was signed and whether it remains fair at the time of enforcement. An agreement that seemed reasonable years ago may no longer be enforceable if circumstances have drastically changed, such as one partner becoming financially dependent or experiencing a serious illness.

Financial Disclosure and Legal Advice

The presence of complete financial disclosure records and signed Independent Legal Advice (ILA) certificates carry significant weight in court. These documents show that both parties entered the agreement with full knowledge of each other’s financial situation and their respective legal rights. Missing or incomplete records raise red flags and can undermine the enforceability of the agreement.

Balancing Choice and Protection

Ontario courts respect a couple’s right to structure their relationship through private agreements. However, they also recognise that one partner may be at risk of unfair treatment or undue influence. Judges will intervene when necessary to prevent hardship or inequitable outcomes, even if both parties originally agreed to the terms.

Recent Ontario Rulings on Cohabitation Agreements

Ontario courts have dealt with a growing number of disputes over cohabitation agreements as common-law relationships become more prevalent. Recent rulings highlight how judges balance contractual freedom with the principles of fairness and transparency.

Agreements Upheld Despite Challenges

In several cases, courts have upheld agreements even when one partner later regretted the terms. For example, when both parties provided full financial disclosure and obtained independent legal advice, the courts were reluctant to interfere. Judges emphasized that individuals who knowingly enter contracts must generally be held to them, even if the outcome later feels unfavourable.

Agreements Struck Down for Unfairness or Hidden Assets

On the other hand, Ontario courts have struck down agreements where there was evidence of hidden property, incomplete disclosure, or significant imbalance. For instance, agreements that left one partner with little to no financial security, or where material assets were not disclosed at signing, were found to be unconscionable. Courts ruled that lack of honesty and transparency undermines the entire foundation of a valid agreement.

Trends in Modern Cohabitation Disputes

The trend in Ontario shows a balanced approach: agreements are respected when proper legal safeguards are followed, but courts will not hesitate to intervene if fairness or disclosure standards are ignored. Judges are increasingly attentive to power imbalances, such as when one partner controls the majority of wealth or legal knowledge. This evolving approach underscores the importance of entering cohabitation agreements with openness, fairness, and professional legal guidance.

 

Practical Steps if You Want to Challenge an Agreement

If you believe your cohabitation agreement is unfair or invalid, there are specific steps you can take under Ontario family law. Acting early and with proper legal guidance can improve your chances of success.

Consult an Ontario Family Lawyer

The first and most important step is to consult an experienced Ontario family lawyer. A lawyer can review the agreement, evaluate whether legal requirements were followed, and determine if there are valid grounds to challenge it. They can also explain your options under the Family Law Act and the likelihood of a successful claim.

Gather Supporting Evidence

To challenge the agreement, you will need evidence showing why it should not be enforced. This may include:

• Proof of pressure, duress, or undue influence at the time of signing.
• Financial documents showing missing or hidden disclosure.
• Examples of unfair or one-sided terms that would leave you at significant hardship.
• Absence of or issues with Independent Legal Advice certificates.

File an Application in Court

If your lawyer advises moving forward, you may need to file an application in the Ontario family court to have the agreement reviewed. The court may:

• Uphold the agreement if it meets all legal requirements.
• Strike down the agreement entirely if it is deemed invalid.
• Modify specific terms to make them more equitable.

Challenging an agreement is not automatic—courts weigh the evidence carefully. That is why proper preparation, documentation, and legal representation are critical.