NOT VERY EASY - AT ALL.
Divorce settlement agreements are, essentially, contracts between spouses that are approved by the family court. To form a valid contract, there must be (1) spouses competent to contract, (2) a proper subject matter, (3) legal consideration, (4) mutuality of agreement between the spouses and (5) mutuality of obligation between the spouses.[1] Spouses are competent if they are the age of majority (18, or 16 with parental consent), sound mind and not under any illegal or unconscionable restrains (such as coercion).[2] However, unilateral mistake is not a basis to set aside a contract - rather, being of “sound mind” means knowing what one is doing, not necessarily the effect of risks, benefits or knowledge the other party may have.[3] Consideration is any legal detriment that has been bargained for in exchange for a promise.[4] For mutuality of agreement (offer and acceptance), a valid contract requires a “meeting of the minds,” which means that the parties mutually assent to all material facts.[5] Finally, mutuality of obligation requires that both parties to an agreement be bound or neither is bound.[6]
To be enforceable, a settlement must be placed on the record or be in writing, signed by the parties or their attorneys.[7] Absent proof of fraud, duress, or mutual mistake, courts are bound by property settlements reached by the parties.[8] The court will not determine whether a settlement agreement is fair; rather, the court simply considers whether it was freely, voluntarily, and understandably made.[9]
This is in part because courts do not examine the adequacy of consideration.[10] Any consideration, however slight, is legally sufficient to support a promise, unless it “shocks the conscience,” which is a very high, rarely used defense. Even “‘[a] cent or a pepper corn, in legal estimation, would constitute a valuable consideration.’”[11]
Family courts generally approve negotiated property settlement agreements, even when those are not equitable.[12] The family court is bound by property settlements reached through negotiation absent fraud, duress, or mutual mistake.[13] In Lentz, for example, the court stated, “we will not rewrite or abrogate an unambiguous agreement negotiated and signed by consenting adults by imposing a ‘reasonable’ or ‘equitable’ inquiry on the enforceability of such agreements.”[14] Rather, in reviewing a property settlement agreement, the family court must consider whether the agreement was entered into and signed freely, voluntarily, and understandingly, not whether the settlement is equitable.[15]
[1] Detroit Trust Co v Sruggles, 289 Mich 595; 286 NW 844 (1939).
[2] In re Meredith’s Estate, 275 Mich 278; 266 NW 351 (1936).
[3] Id.
[4] Id
[5] Id.
[6] Reed v Citizens Ins Co, 198 Mich App 443, 448, 499 NW2d 22 (1993), overruled on other grounds, Griffith v State Farm Mut Auto Ins Co, 472 Mich 521, 697 NW2d 895 (2005).
[7] Id.
[8] Id.
[9] Balabuch v Balabuch, 199 Mich App 661, 502 NW2d 381 (1993).
[10] GMC v Department of Treasury, 466 Mich 231, 644 NW2d 734 (2002).
[11] Id.
[12] Buzynski v Buzynski, 369 Mich 129; 119 NW2d 591 (1963).
[13] Lentz v Lentz, 271 Mich App 465; 721 Nw2e861 (2006).
[14] Id.
[15] Id.