If people who intend to marry wish to enter into an agreement in relation to the relationship, then such an agreement would be called a pre-nuptial agreement. Refer to our Pre-nuptial Agreements Kit.

Cohabitation agreements are much the same as a "defacto" agreement. A defacto agreement would normally refer to people of different sexes living in a defacto relationship. While there are different legal definitions of a defacto relationship, for these purposes we essentially describe it as people of opposite sex living together as husband and wife. Such agreements can also be referred to as cohabitation agreements. When people of the same sex reside together in a relationship, then the agreement made between them would usually be called a cohabitation agreement.

Unless the agreement specifies otherwise, the effect of the cohabitation agreement may continue even though the parties subsequently decide to marry. It would then operate as a pre-nuptial agreement.

Property disputes between people of the same sex or opposite sex who live together outside of marriage do not fall within the provisions of the Family Law Act. Disputes arising from their relationship are normally determined by the law relevant to the State in which they reside. There are a number of States and Territories in Australia who have specific defacto legislation. These are New South Wales, Victoria, South Australia, Northern Territory and the Australian Capital Territory.

The other States and Territories do not have specific legislation that refers to people in a relationship outside marriage. In those circumstances the common law applies. The common law is the law that has evolved over time and is not the result of legislation (law passed by Parliament). The common law largely makes no distinction about whether the parties were in a relationship or were strangers. The same law applies to both.

In those States where there is no legislation, any dispute arising out of a breakdown in the relationship would be determined in the Supreme Court of the State. This can be an expensive process. Even in the States and Territories where defacto legislation exists, any dispute arising out a failed relationship can be costly and time consuming. For that and other reasons, parties often decide to enter cohabitation agreements so that it can be clearly set out what assets were brought by each of them into the relationship, how the continued ownership of those assets are to be dealt with and the use of those assets, together with what should happen in the event that the relationship breaks down.

In the States where the common law applies, then:

•  if the agreement is certain and in writing;
• is stamped by the State Taxation Department;
• if the parties have each had independent legal advice;
• the parties continue to operate within the terms of that agreement during the course of their relationship;

it would be unlikely that a court would set aside the terms of the agreement subsequently.

However, in States and Territories where there is legislation, other factors need to be taken into account. It may be that if agreements meet the criteria set out above then again they may be followed by the court in the event of a later dispute.

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Read about Co-Habitation Agreement Kits.

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