Property Settlement Agreement Form

Note: This summary is not intended to be an all inclusive discussion of the law of separation agreements in North Dakota, but does include basic and other provisions.

General Summary:

Separation and Property Agreements may be entered into before a divorce is filed to be effective immediately. When the parties entered into a separation agreement as a final division of the marital property, expressly providing they would be bound by the terms of the agreement in the event of future divorce proceedings, the agreement cannot ordinarily be later modified by a trial court in a divorce proceeding. North Dakota courts will examine the property settlement agreement to insure that it is fair and reasonable. Ordinarily an Agreement that is fair and reasonable and not unconscionable will not be subject to modification by the court.

Statutes:

Title 14

DOMESTIC RELATIONS AND PERSONS

CHAPTER 14-07

HUSBAND AND WIFE

Permanent alimony - Division of property:

When a divorce is granted, the court shall make such equitable distribution of the real and personal property of the parties as may seem just and proper, and may compel either of the parties to provide for the maintenance of the children of the marriage, and to make such suitable allowances to the other party for support during life or for a shorter period as to the court may seem just, having regard to the circumstances of the parties respectively. The court from time to time may modify its orders in these respects. Section 14-05-24.

Contracts to alter marital relations:

A husband and wife cannot by any contract with each other alter their marital relations, except that they may agree in writing to an immediate separation and may make provision for the support of either of them and of their children during such separation. The mutual consent of the parties is a sufficient consideration for such a separation agreement. Section 14-07-07.

Case Law:

When a divorce is granted, N.D.C.C. § 14-05-24 requires a trial court to "make such equitable distribution of the real and personal property of the parties as may seem just and proper." In doing so, however, the North Dakota Supreme Court has encouraged district courts to recognize valid agreements between divorcing parties. Crawford v. Crawford, 524 N.W.2d 833, 835-36 (N.D. 1994); ; Peterson v. Peterson, 313 N.W.2d 743, 744-45 (N.D. 1981). The public policy on divorce favors a "prompt and peaceful resolution of disputes." Clooten v. Clooten, 520 N.W.2d 843, 846,(N.D. 1994). "[T]o the extent that competent parties have voluntarily stipulated to a particular disposition of their marital property, a court ordinarily should not decree a distribution of property that is inconsistent with the parties' contract." Wolfe v. Wolfe, 391 N.W.2d 617, 619 (N.D. 1986).

District courts will not, however, blindly accept property settlement agreements. Clooten v. Clooten, 520 N.W.2d 843, 846,(N.D. 1994). The district court has a duty to make a just and proper distribution of property under N.D.C.C. § 14-05-24 and this includes the authority to rewrite a property settlement agreement for mistake, duress, menace, fraud, or undue influence under N.D.C.C. § 9-09-02(1). Wolfe v. Wolfe, 391 N.W.2d 617, 619 (N.D. 1986). Also, a district court will not enforce an agreement if it is unconscionable. Crawford v. Crawford, 524 N.W.2d 833, 835-36 (N.D. 1994) (stating "the stipulation is so one-sided and creates such hardship that it is unconscionable").

Therefore, in North Dakota, the district courts make two findings when considering whether a settlement agreement between divorcing parties should be enforced. The first inquiry is whether the agreement is free from mistake, duress, menace, fraud, or undue influence under N.D.C.C. § 9-09-02(1). Wolfe v. Wolfe, 391 N.W.2d 617, 619 (N.D. 1986). The second inquiry is whether the agreement is unconscionable. Crawford v. Crawford, 524 N.W.2d 833, 835-36 (N.D. 1994).

A property settlement agreement incorporated in a divorce decree may not be later modified by a trial court if it is intended by the parties to adjust finally all the property rights of the parties. Sinkler v. Sinkler, 49 N.D. 1144, 194 N.W. 817 (1923). To allow the court to modify a contract under these circumstances would serve to discredit all contracts between a husband and wife when divorce proceedings are initiated. The court's authorization under § 14-05-24, NDCC, to make a just and equitable distribution of properties does not allow it to rewrite a valid contract absent statutory grounds governing rescission. Peterson v. Peterson, 313 N.W.2d 743 (N.D. 1981).