Until recently, it was very rare for personal relationships to be governed by a written contract. In recent years though, there has been a tremendous increase in the use of formal agreements to govern the rights and responsibilities of such relationships. Probably most common is the pre-nuptial agreement (or prenup), a contract executed prior to marriage which determines the legal obligations of the parties during the marriage and afterwards in the event of a divorce. Pre-nuptial agreements usually require that the parties enter into a legal-recognize marriage in order for the terms of the agreement to become effective. As a result, if the parties do not marry, the terms of the contract are not binding on either party. This requirement that the parties marry in order for the agreement to go into effect is known as a “condition precedent.”
Cohabitation agreements are contracts also growing in popularity. These are agreements that dictate the rights and obligations of the parties while living together and can resolve ownership issues of any property the parties acquire (such as custody of pets).
Unlike, a pre-nuptial agreement though, a cohabitation agreement does not have a condition precedent requiring the parties to marry in order for the agreement to become effective. This means that the agreement can be instantly enforceable and that it can be an agreement between more than just two parties. For instance, if four roommates share an apartment as co-tenants, they can enter into a cohabitation agreement which can govern nearly any aspect of their relationship and the agreement can be enforceable immediately upon execution.
Fans of the TV show “The Big Bang Theory” will remember that Sheldon presented his girlfriend, Amy, with a “Relationship Agreement” which the The New York Times recently wrote an article entitled “Just Call It A Pre-Prenup.” Readers should be aware that the title of this article is misleading because a “relationship agreement” is not a pre-nuptial agreement. In fact, a relationship agreement is more similar to a cohabitation agreement than a prenuptial agreement. A relationship agreement can determine many aspects of the relationship including roles of the parties, financial support and ownership rights but, unlike a cohabitation agreement, it does not necessarily require the parties to live together. The most important difference between a pre-nuptial agreement and a relationship agreement is that a relationship agreement does not contain a condition precedent requiring the parties to marry in order to become effective. Like a cohabitation agreement, a relationship agreement can be effective and enforceable immediately upon execution.