Raleigh, North Carolina divorce attorney Stephanie J. Gibbs educates the legal consumer on the issue of whether a Settlement Agreement signed by parties who are separated or divorced can be voided or changed in North Carolina.

Raleigh, North Carolina (NorthCarolinaFamilyLawNews.com) — If you are unhappy with the settlement agreement you signed with your spouse to resolve issues of alimony, division of marital assets and/or other divorce-related issues, you may wish to seek the advice of a knowledgeable family law attorney to determine your options.

The first question you and your attorney will need to answer is whether the agreement was “incorporated” into a court order – that is, whether your agreement was approved by the court and attached to or made part of an order signed by a judge and filed with the court or is a stand-alone agreement or contract that has not been incorporated into a court order. This article addresses only those settlement agreements that are not incorporated into court orders.

Settlement agreements that have not been incorporated into a court order are viewed by the law as contracts. In general, the courts are without authority to alter the terms of a contract. In North Carolina, however, the courts retain jurisdiction over child custody and support matters until the child reaches age eighteen.

Therefore, regardless of the fact that you and your spouse have an unincorporated settlement agreement for child support and custody, the court still has power to make rulings on those issues, whether or not the rulings conflict with the express terms of the settlement agreement. For example, if you are unhappy with the custody provisions in your settlement agreement, you may file an action for an initial custody determination at any time. The courts do not, however, have authority to alter provisions of your settlement agreement that are not related to child custody and child support.

In some circumstances, however, you may be able to have the settlement agreement “set aside” – thrown out – by the court, or declared void, meaning that technically, no contract legally existed in the first place.

North Carolina courts typically honor and enforce contracts if the parties mutually understood and assented to the terms (there was a “meeting of the minds”); the contract terms are legal and in keeping with public policy; and there was “consideration” when the contract was formed – that is, the promises exchanged by the parties represented either a bargained-for gain or legal detriment.

Some of the factors that can be used to argue that a contract should be set aside or declared void include: (1) that there was no “meeting of the minds,” and that no contract therefore existed; (2) that one or both parties lacked mental capacity to enter into a contract; (3) that a party used coercion or force to make the other party sign the contract; (4) that one party was making a promise that could not be carried out, or was an illegal act; and that the contract is “unconscionable.” An “unconscionable” contract is one in which one spouse unfairly obtained the signature of the other, and in which the terms are so one-sided and obviously unfair that they “shock the conscience.”

Whether a contract is unconscionable will depend upon the facts of each case. To show that your settlement agreement is unconscionable, you would have to prove two things to the court: First, you must prove that the agreement was “procedurally unconscionable,” meaning, in essence, that you were tricked, forced or otherwise coerced into signing the document. Some North Carolina cases refer to these types of circumstances as “bargaining naughtiness.” For instance, if you were presented with a contract, but were then tricked into signing another document with different terms, those circumstances might be considered procedurally unconscionable. Keep in mind that the law presumes that anyone who is educated has read the document that he or she signed. Other circumstances that might lead a court to consider the execution (signing) of a contract was procedurally unconscionable might include your spouse’s awareness that you were mentally incapacitated (by prescription drugs, for instance) when you signed the agreement; that your spouse threatened you into signing the contract; and that your spouse was represented by an attorney but you were not represented when you signed the agreement.

Second, you must prove that the agreement was “substantively unconscionable,” meaning that the terms of the contract, itself, are so unfair as to “shock the conscience.” For example, if you and your spouse were married for a lengthy period and you are dependent upon your spouse for financial survival, but the agreement you signed does not provide you with spousal support or any portion of the marital assets, a court might deem that portion of your agreement substantively unconscionable.

One point to keep in mind: Under North Carolina case law, spouses are generally presumed to be in a fiduciary relationship with one another. This means that, under certain circumstances, the court holds spouses to a higher duty of trustworthiness in contract negotiations with one another than it would with individuals outside the marriage. Thus, misrepresentation of contract terms, hiding of assets and other instances of unfair dealing are generally held by North Carolina courts to be a breach of a spouse’s fiduciary duty, and this conduct is potential evidence of unfair dealing in a settlement agreement. In determining whether a fiduciary duty existed between you and your spouse when you signed your separation agreement, the court will consider a number of circumstances, including whether you were living together when you entered into the contract, and whether one or both of you were represented by an attorney.

Settlement agreements are often the most cost-effective and amicable means of resolving the issues that arise in divorce. However, if you believe the agreement you signed is not fair you should seek the advice of a qualified family law attorney with specific knowledge and experience in this area of law.

Contributor: Stephanie J. Gibbs, is a Raleigh Divorce Attorney and a member of the North Carolina Family Law Firm of Gailor, Wallis & Hunt, PLLC. For more information contact the Raleigh, North Carolina Family Law Firm of Gailor, Wallis & Hunt at 1101 Haynes Street, Suite 201, Raleigh, NC 27604, Tel: 919-832-8488 or go to www.gailorwallishunt.com.

Disclaimer: The information contained in this article is intended as a general guide and is not to be used as legal advice by Gailor, Wallis & Hunt, PLLC. Whether or not you may be entitled to take action in regard to the information addressed in this article can only be determined after a thorough review of the facts and circumstances of your case by a qualified family law attorney.

This entry was posted on Monday, November 10th, 2008 at 9:23 pm and is filed under Separation and Divorce. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.