Opinion ID: 2717285
Heading Depth: 3
Heading Rank: 1

Heading: Consideration in postmarital contracts

Text: All contracts made between spouses, not otherwise invalid because of any other law, are valid. HRS § 572-22 (1987). However, the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and consideration. Restatement (Second) of Contracts § 17 (1981) (emphasis added). This court has stated that “[a] compromise, like any other contractual agreement, must be supported by consideration.” Sylvester v. Animal Emergency Clinic of Oahu, 72 Haw. 560, 567, 825 P.2d 1053, 1057 (1992). Therefore, consideration is a threshold issue in determining whether a contract exists. “It is well-settled that consideration is an essential element of, and is necessary to the enforceability or validity of, a contract.” Douglass v. Pflueger Haw., Inc., 110 Hawaiʻi 520, 534, 135 P.3d 129, 143 (2006) (quoting Shanghai Inv. Co., Inc. v. Alteka Co., Ltd., 92 Hawaiʻi 482, 496, 993 P.2d 516, 530 (2000), overruled on other grounds by Blair v. Ing, 96 Hawaiʻi 327, 31 P.3d 184 (2001)). To constitute consideration, a performance or a return promise must be bargained for. Restatement (Second) of Contracts § 71 (1981). Consideration may take many forms; it is well established that “[f]orbearance 31 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER to exercise a right is good consideration for a promise.” Shannon v. Waterhouse, 58 Haw. 4, 7, 563 P.2d 391, 393 (1977). Although the family court did not address the issue of the lack of consideration, the determination of lack of consideration is a question of law for the court to decide, reviewable de novo. Stern v. Stern, 243 A.2d 319, 320 (Pa. 1968); Colligan v. Smith, 366 S.W.2d 816, 818 (Tex. App. 1963); Farmers Union Oil Co. of New England v. Maixner, 376 N.W.2d 43, 48 n.2 (N.D. 1985). This court has not examined what constitutes consideration for a postnuptial contract between spouses. Other courts have held that neither the marriage itself, nor continuation of the marriage, can act as sufficient consideration for a postnuptial agreement because past consideration cannot support a current promise. See Bratton v. Bratton, 136 S.W.3d 595, 600 (Tenn. 2004); Whitmore v. Whitmore, 778 N.Y.S.2d 73, 75 (2004).19 In Bratton, a husband signed a letter in which he promised “never to be the cause of a divorce.” Bratton, 136 S.W.3d at 597. In the event that he broke the promise, he promised to give to the wife “50% of my present belongings and 50% of my net future earnings.” Id. The Supreme Court of 19 But cf. Zagari v. Zagari, 746 N.Y.S.2d 235, 238 (2002) (declining to find lack of consideration in a post marital agreement where the agreement recited consideration and the spouse seeking to invalidate the agreement offered no proof on the issue of consideration). 32 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Tennessee found that a promise to stay in a marriage is not consideration. Ms. Bratton’s promise not to leave her husband is clearly not consideration for the agreement. Both parties’ admitted that they were not having marital difficulties at the time the agreement was signed. Therefore, this was not a reconciliation agreement where separation or divorce was imminent, making the wife’s promise to remain in the marriage a meaningful act. Id. at 603 (emphases added). Similarly, in Whitmore, 16 years before actually divorcing, the husband and wife executed a document entitled “Marital Agreement” in which the wife “waived her right to any business property owned by the husband, regardless whether it was acquired before or after the marriage.” Whitmore, 778 N.Y.S.2d at 74. The court found that: Here, the wife received no consideration for signing the postnuptial agreement. The postnuptial agreement does not recite any consideration, and does not contain any mutual promises. Although the wife released her claims on the husband’s business property, he did not relinquish any rights to any of her property or give the wife anything in return. The husband claims that his continuing to remain married to the wife provided adequate consideration. We disagree. Id. at 75 (emphases added). Therefore, when there is no actual intent or contemplation of divorce, postmarital contracts, in which one spouse promises to relinquish significant property rights in the event of divorce, and the other side only promises to remain in the marriage or to not get divorced, are void for lack of consideration. 33 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER