The use of penalty clauses in prenups to punish cheating spouses
30 November 2015
Maeve O'Higgins considers the use of penalty clauses in prenups to punish cheating spouses and the use of other conduct clauses to control spouses' marital behaviour.
An article published earlier this year (here) discusses the recent development in England and Wales of inserting clauses into prenuptial agreements between couples about to get married which purport to reduce the financial provision that will be received by a spouse who is discovered to have had an affair during the marriage.
Clauses such as these "infidelity penalty clauses", which seek to regulate a couple's behaviour during their future marriage are commonly included in prenuptial agreements between spouses in the USA. For example, US prenups have included provisions such as a $100,000 penalty payment payable on any occasion of infidelity, and it was widely reported in the press when Charlie Sheen and Denise Richards got married that the couple had agreed on a $4 million penalty in their prenup for infidelity during the marriage, to be paid by either partner.
Other such "conduct" clauses that have been included in US prenups include the right to conduct regular drug tests on a spouse with a history of drug misuse - with financial penalties for failing any tests; a wife agreeing to host a dinner party for her husband and his business associates twice a week; agreement by a husband to accompany his wife to the ballet once a month; limiting a husband to attending one football game per season; a wife agreeing to maintain her weight at not more than 120lbs, subject to a fine of $100,000 if exceeded; as well as provisions specifying the number of evenings per week to be spent together by the couple.
However such conduct clauses are anathema to the long-established principle in English family law that conduct is irrelevant when dealing with the financial aspects of the breakdown of a marriage, unless a spouse' s conduct or contribution to the welfare of the family is exceptional - i.e. appallingly bad or extraordinarily wonderful (sometimes referred to as a "stellar contribution"), so that it would be inequitable for the court to disregard it.
Obviously couples are free to agree whatever provisions they wish in any agreement they enter into but if one of them is dissatisfied he or she can apply to the court, so long as prenups remain legally unenforceable and subject to the court's overall discretionary jurisdiction on divorce. So far there is no reported case in England and Wales where a court has been asked to determine whether a penalty clause in a prenup should be upheld.
I am very doubtful whether such a clause would be upheld by the court and in my view it would be a retrograde development for couples to include such clauses in prenup or postnuptial agreements. I have not so far come across any such clauses in any of the English marital agreements I have seen and I question how widespread this alleged new development of including such clauses really is in this country.
Maeve O'Higgins
For more information about entering into a prenuptial or postnuptial agreement, please contact Maeve O'Higgins Family Law Partner, Burlingtons Legal | Email: maeve.ohiggins@burlingtonslegal.com, Tel: +44 (0) 207 529 5420
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