Nadia MacLeod

Six Principles of Contract Law

By Nadia MacLeod on March 23, 2018

A financial agreement is like any other contract and subject to the normal principles of Australian Contract law.

Most contracts pose no problems – they are usually a simple interchange of cash for goods. But when contracts get more complicated they can, and do, go wrong.

This is less likely to occur when the parties understand what they are doing, what their rights and obligations are, and how to recognise potential problems.

A contract is a legally binding promise or a set of promises between two parties. In this context a promise is an undertaking by one person to do something or refrain from doing something if another person does something or refrains from doing something or makes a promise in return.

In order for a contract to be valid, the six principle of contract law must be met. These are:

Agreement
Consideration
Intention
Capacity
Genuine Consent
Legality

1. Agreement

There must be an offer and an acceptance with a definite agreement between the parties. In simple terms, one party must make a clear offer, and the other party must accept it.

2. Consideration

Except in very limited circumstances there can be no contract or agreement without consideration.

Consideration is the exchange of promises by the parties to the contract or agreement. It can be the payment of money, the delivery of equipment, the promise to do or perform a service or work, the promise not to take an action or not to take or enforce a right.

3. Intention

Each person, on entering a contract, must intend to be bound by it. For a person to be bound to a contract, s/he must seriously intend to create legal obligations and have intended the agreement to have legal consequences.

4. Capacity

Both parties in a contract must have the necessary mental capacity to understand what they are doing. Under common law, anyone has the right to enter into a contract but the following groups of people are considered likely to lack the necessary capacity to a certain extent:

young people (persons under the age of eighteen);
people who have a mental impairment (including an intellectual disability); and
people under the influence of drugs or alcohol.

For a person to avoid a contract on the ground of their incapacity, they must also show that they lacked capacity to enter into a contract and that the other party knew or ought to have known their incapacity.

A contract is voidable at the option of a party who, as a result of mental disorder or intoxication, is unable to understand the nature of the contract being made – provided that the other party knew, or ought to have known, of that person’s disability.

The party seeking to withdraw from the contract has the onus of proving both these requirements – that is;

(a) that they were suffering from such a disability and

(b) that the other party was – or ought to have been – aware of it.

5. Genuine consent

Both parties agree to the contract of their own free will; a party’s genuine consent is an essential element of a legally binding contract.

Genuine consent to enter into a contract can be affected by a number of issues. For example, during the contractual negotiations, there may have been:

Undue influence. Undue influence exists where one party exercises influence over the other and is so influential that the party cannot be said to have entered into the contract voluntarily. Where the influence is said to be ‘undue’ the court may set aside the contract;
Mistake as to the terms and identity of the person;
Misrepresentationis the giving of false information by one party to the other before the contract is made, which induces them to make the contract. If you make a contract in reliance on a misrepresentation and suffer loss as a result, you can cancel the contract or claim damages;
Duress; Duress is defined as ‘actual or threatened violence to an individual to obtain a contractual promise’. If it is established that consent is obtained through duress then the weaker party may choose to avoid the agreement;
Unconscionable conduct; Unconscionable conduct also deals with transactions between dominant and weaker parties; it therefore overlaps with duress and undue influence;

Each of these factors or events may mean that consent was not freely given by one of the parties and that party may therefore be able to avoid their contractual obligations.

6. Legality

All of the parts of, or the subject matter of the contract must be legal.

When considering Financial Agreements, sections 90G and 90UJ of the Family Law Act are particularly relevant as they require each party to the financial agreement to receive independent legal advice and meet certain requirements before a financial agreement is binding on the parties.

Following these six principles will ensure your agreement is legally binding and provides the protection and outcome you expect.

What are the disadvantages of entering into a financial agreement?

By Nadia MacLeod on May 23, 2017

The disadvantage of making a Binding Financial Agreement is that you give up the right to have a Court decide for you, about the matters you have dealt with in your Agreement. This means that the court cannot take into account matters which it otherwise would because you have decided to control your own affairs.

For example, lets say you have stated in your agreement that “each party will retain all their right title and interest to their superannuation entitlements and have no further claim on the entitlements of the other.” You can’t then change your mind and ask the court to make a decision about giving you a piece of the other persons Superannuation, without first attempting to have the agreement set aside.

Pay me what you owe me – Hall v Hall – Tales from the High Court

By Nadia MacLeod on January 31, 2017

Hall v Hall and the meaning of ‘financial resource’ and spousal maintenance.

Recently the High Court of Australia determined the case of Hall v Hall [2016] HCA 23 concerning a dispute over the payment of spousal maintenance. We will have a look at what a ‘financial resource’ is and whether no knowledge of that entitlement can impact a claim for spousal maintenance.

What does the Family Law Act say?

The Family Law Act 1975 sets out two criteria that need to be met for the payment of Spousal Maintenance.

Under the Family Law Act 1975, a party to a marriage is entitled to the payment of spousal maintenance from their ex-partner if they are unable to adequately and independently support themselves.[1] For this to occur two criteria must be met:

The person must show evidence that they are unable to support themselves independently (i.e. a need for resources); and
The other person must have the financial capability to meet these financial needs.

In making this order, a court will have regard to the applicant’s:

Age;
Health;
Income;
Ability to gain employment;
Availability of financial resources;
Care of any children under 18; and
Other relevant circumstances.[2]

Essentially, the intention is to allow the Court to make orders that enable both parties to adequately support themselves and any minors.[3]

So what happened in this case?

Hall v Hall spousal maintenance — What happened between Mr and Mrs Hall.

A husband (a property developer) and wife (medical practitioner) separated, with the wife submitting an application to the Family Court for interim spousal maintenance of $28,000 per month, based on her current needs and to assist with the children’s school fee payment. Whilst the wife’s financial statement disclosed an interest in her late father’s estate, she did not have knowledge of the particulars of the benefit, nor a copy of the Will.

The wife was successful in her application for spousal maintenance, but the husband appealed the decision.

It was later revealed that the wife was entitled to a payment of $16.5 million (providing she was 60 years old and separated from her husband) and an annual payment $150,000 until the lump sum was claimed. The wife alleges she was not aware of the entitlement. She argued that her lack of knowledge meant that this entitlement should not be classified as a ‘financial resource’.

The issues

Whether the financial interest acquired by the wife can be classified as a ‘financial resource’ under the Family Law Act; and
Whether the interim order for payment of spousal maintenance to the wife should be overturned based on the new evidence.

What is a financial resource?

A financial resource is something other than property that may have a future financial benefit to one or both parties. Whilst the definition of a financial resource is not provided by legislation, it can include a beneficial interest under a discretionary trust or inheritance. However, the law states that a financial resource does not include the expectation that one will benefit from the Will of a person who is still alive.

What did the High Court conclude?

Courts Decision — The High Court found that the entitlement should be classified as a ‘financial resource’, as it was directly relevant to the wife’s ability to support herself.

The High Court found that the entitlement should be classified as a ‘financial resource’, as it was directly relevant to her ability to support herself. Despite the fact the wife made no claim to the entitlement, she was able to claim the benefit and could rely on the payment to support herself. The case determined that a ‘financial resource was “a source of financial support which a party can reasonably expect will be available…to supply a financial need or deficiency.”

Important lessons

Spousal maintenance is not an automatic right and specific criteria must be met.
A future benefit or ‘financial resource’ may be taken into account when making family law decisions, such as property settlements and interim orders for spousal maintenance.
A Court must be satisfied that the applicant party is unable to support themselves independently and that the other party has capacity to provide spousal maintenance.
The Court will make orders that are just and equitable, ensuring the circumstances of parties are taken into account.

[1] Family Law Act 1975 s 72(1).

[2] Family Law Act 1975 s 75 (2).

[3] Family Law Act 1975 s 74(1).

How do I find a good individual or couples counsellor?

By Nadia MacLeod on December 24, 2016

Starting therapy, whether you’re new to it or returning after some years off, can be intimidating. There are plenty of counsellors on offer, but how do you know who is right for you? How do you know if someone you’re interested in has the right experience to work with you?

This list of questions is designed to determine if your new therapist is a good fit, and what you can reasonably expect out of the experience.

How do you feel with this person?

Although it’s easy to walk into a new office and feel utterly blank at the prospect of spilling your secrets to a stranger, remember that counsellors chose their profession for a reason. But not every therapist is going to make you feel at ease and in a safe space to unload.

Some therapists are warm and engaging, others are cold and distant. It’s not a character flaw—professional arrogance can be found in most fields—but if you land in front of someone who is making you feel uncomfortable just by sitting there with their notepad and nodding critically, the relationship is not going to work.

Laying judgment on you is a pretty bad indicator in an opening session—judging your actions is not a therapist’s job. Helping you see the patterns underneath your actions and their effects on your life from a neutral position is within their job description.

Remember that you’re not required in any way to continue with a counsellor after the first session. If your instincts steer you away from this therapist, honour them. But on the other hand, if you visit ten therapists and don’t like any of them, there might be something going on with your thoughts and emotions about beginning therapy that’s actually unrelated to any of the individuals. In that case, it’s a good idea to choose the therapist you reacted the least negatively to and stick it out with them for a while, to uncover why you have an initial aversion to the process.

Does the therapist have experience working with the particular issues for which you are seeking therapy?

Similar to doctors and healers, counsellors develop expertise in particular issues, through study and practice. A good therapist will explain their areas of interest and experience, usually right on their website, and certainly in the first visit. The more work a therapist has put in treating clients with specific traumas and issues, the more likely they’ll know how to help you.

A therapist with experience has built a solid toolkit of skills, keeps up with their training, and consults with their peers on best practices. They’ll teach you exercises and visualizations to change negative behaviours, and help you learn how to calm strong emotions.

If you’re looking for a couple’s therapist, ask if the therapist has specific training in couples work—it’s quite a different skill set than what’s required for individual or group therapy.

Guaranteed or your heartache back…

Beware of counsellors who make unconditional guarantees of healing. The human psyche is very complex, and though a therapist is right to offer hope for healing and a path towards it, an iron-clad promise is not realistic, nor useful.

Counsellors work with you to unpack layers of protective behaviours you might not even realise you engage in. It can take years to change these habitual patterns, or to recover from trauma. That’s not to say it can’t happen, but therapists aren’t magicians, and what they offer cannot be packaged up with a flashy guarantee. Therapy is different for every person, and can even be different for someone returning to therapy after a break.

What are the counsellor’s core philosophies and methodologies around healing?

This is an important point, and one you’re right to ask about in an initial session. Does this therapist view humans as basically good and capable of healing and growth, or as unmanageable beings crashing around their lives (and it’s their unfortunate job to listen to them)?

For a deep and productive exchange between two people, particularly when the goal is mental and emotional healing, there must be compassion, and a certain degree of optimism. Therapy can be hard work—does this counsellor even believe people can change their destructive habits? If they don’t, you might as well toss their cheque out the car window.

Does this therapist foster independence or dependence in their clients?

clock — Does your therapist foster dependence or independence – will you need to see them for a short time or the rest of your natural life?

From early on in the therapeutic relationship—sometimes the first visit, sometimes the first few visits—a good counsellor will give you a clear explanation of their approach for your issues, and the modalities they’re going to use. If this counsellor has seen your sort of concerns before, they’ll know how to help early on. They can and will explain how you’ll know when this course of therapy has finished.

Is this therapist licensed?

licence — Does your therapist have the required training and licensing?

This is not a make or break issue, but it’s good to note. Being licensed means the counsellor has extensive experience after university (the requirements vary across countries). They passed a licensing exam, and have had more supervision of their practise than non-licensed therapists. This is not to say they’re automatically better at their jobs, but that they probably went through more rigorous training.

The good news is, when you find a counsellor that is a good fit for you, you’re much more likely to get the results you’re looking for. Just do your due diligence and ask the right questions before choosing your next counsellor to ensure a positive outcome.

About Clinton Power

Clinton Power is a relationship counsellor, individual psychotherapist and the owner of Clinton Power + Associates, a private practice dedicated to helping singles and couples move out of relationship pain. Clinton’s book 31 Days to Build a Better Relationship is available for Kindle on Amazon. Follow Clinton on Twitter or Facebook.

How do I know if my relationship is worth saving?

By Nadia MacLeod on December 22, 2016

Humans are one of only a few animal species who mate for life (sometimes). We’re joined in this practice by whales and geese, and these animals don’t get accused by their mates of “not being present.”

Humans are the only animals with a concept of past and future, and these concepts set up expectations that can doom relationships. We compare our present partner to the last one or the imaginary next one—these idealisations set up impossible standards.

How do you know if this relationship is doomed, if it can be saved, or even if the relationship is worth saving?

There’s no magic formula, but there are some questions you can ask to determine where the relationship stands. Enlisting the help of a good couples therapist will lend more clarity to the situation. A skilled therapist will help both partners understand their own negative patterns and how to create healthy, loving ones instead.

At the root of the relationship lies one question, which both partners must answer: does being together increase or decrease everyday wellbeing and happiness?

Before you read the follow-up questions to that main one, there’s another point that must be addressed. If there’s violence in the relationship, you need professional help, a separation, or both. Violence is obviously traumatic to the abused party, but it’s also bad for any children involved (even to witness it), and sometimes for family members and friends outside the relationship.

Do you like to be together?

Couple enjoying their company — Do you like to spend time together?

It’s nearly impossible to get back the initial spark of a relationship once it burns out. There are actual physiological reasons for the wild attraction that happens at the beginning, and successful relationships learn to adapt to the next phase.

However, if you’ve come to the point where neither of you can stand to be in the same room, this is a bad sign. If it’s always a chore to get through another silent dinner, why do you keep having dinner together? One of the main reasons we enter into relationships is to enjoy another human’s company. Relationships take work to succeed, but they shouldn’t be hard labour every day.

Do you trust your partner?

Fully trusting another person is one of the hardest things to do. Our every instinct seems to warn against it, but for some people, we’ll take that leap. If you have given your partner your trust and they’ve repeatedly broken it, the relationship is in trouble. Breaking trust doesn’t have to be as obvious as cheating on you or stealing from your bank account. A pattern of small, seemingly harmless lies demonstrates a lack of commitment to the relationship. Your partner could be holding back information for purposes of control, in a kind of power play. When you confront them on this behaviour, what is their response? Are they evasive? Defiant? Mocking? All these are red flags.

Does respect flow both ways?

flowing both ways — Is respect a two way street in your relationship?

Along the same lines as trust, mutual respect is critical for the health of a relationship. If either party is constantly belittling and patronising the other, for whatever reason, the relationship will fail. In many relationships, one spouse makes most of the income while the other raises the children and keeps house—there’s nothing wrong with this setup, as long as both roles are held in equal respect.

If you’re looking to improve yourself in some way—returning to university, losing weight, quitting smoking—and your partner stands firmly in the way of this change, that’s another sign of eroding respect. They feel so threatened by your possible change (and what it could mean for them) that they’ll tear you down to prevent it from happening.

Are you able to fight with integrity, and move on?

fighting fair — Do you fight fair and move on? Or are the gloves off for another bloody encounter?

All human relationships involve conflict, it’s part of how we communicate. (Laughter, sex, hand gestures, and eye contact are a few other ways). In a healthy relationship, arguments lead to growth. When both people can put their egos aside and really listen, empathy and patience will bloom. In rocky relationships, where both partners are lashing out, blindly defending their positions and nursing old resentments, there’s no room for compassion. The relationship is in trouble.

A variation on this theme is when conflicts always turn physical (in other words, sex). While this sounds better than retreating to your separate corners, it’s unlikely that the core problem was resolved. It will resurface again later, and patching another round of sex over the issue may or may not help.

Finally, be honest with yourself if the relationship is clearly ending. You might want to save it, but your partner is on their way out. You can strive to fix this or that about yourself, spend a pile of money on them, beg them not to go—but you’re rearranging the deck chairs on the Titanic. When you’re alone in the desire to keep the relationship alive, the least traumatic thing to do is accept the loss, grieve it, and move on. A skilled relationship therapist can help greatly with that process too.

About Clinton Power

Christmas Pressures on Relationships

By Nadia MacLeod on December 19, 2016

The Christmas season can be a stressful time for any relationship. You have the added expenses, the sometimes unwanted interactions with extended family, the excessive alcohol (and hangovers!) and – in Australia – the sticky, irritating heat that makes everything just that little less bearable.

Researchers completed an interesting Facebook analysis recently, that shows that the primary time frame for breakups is just prior to Christmas, so what’s going on?

Why are the stressors experienced around Christmastime particularly damaging to a relationship and what can we do to prevent them?

Money Trouble

Money is almost always a contentious issue in relationships, but during the holidays, finances can be stretched much further than any other time of year. Arguments can crop up over general expenses, post-Christmas debt, funds spent on gifts for other people outside of the relationship or family, as well as lack of income due to time away from work.

How to avoid this: Communicate at all times about money and set a realistic budget. If money is really tight but you feel obliged to buy gifts for family and friends, maybe suggest a Secret Santa arrangement.

Family Friction

Friction over family commitments can ignite arguments. — Friction over family commitments can ignite fights.

Arguments can crop up about having to spend time with extended family, trying to decide whose set of family to spend time with, how much is spent on gifts for them and similar.

If you really don’t like your partner’s family (or your partner doesn’t like yours), resentment can build because you’re basically being asked to spend a large amount of time in the company of somebody you hate. You may feel worried your partner might not remain civil or may embarrass you. Even if you love your family-in-law, there’s still the added stress from having to accommodate or impress company.

Newer couples might also be under stress from having to meet their partner’s family for the first time. The stress of this is akin to attending a prolonged job interview, as your relationship will be under intense scrutiny, even if it’s subtle.

How to avoid this: Decide well in advance (even the year before) whose family you’ll be spending time with each year, perhaps visiting one set of in-laws one year, then the other set in consecutive years. Communicate behavioural expectations beforehand and limit the amount you both drink, if you feel tensions may develop. Remember, you don’t have to jam-pack everything into one or two days – spread it out if your schedule is too hectic.

If you or your partner feel uncomfortable around family, develop a code word that indicates you’ve had enough, so you can pull the plug and make an excuse to go home. It’s all about working as a team and doing so will strengthen your bond. Finally, if it’s that bad, is there any reason you can’t avoid extended family altogether and spend Christmas alone?

High Expectations

As much as we’d love our Christmas to look like something out of a Disney movie, the reality is usually very different. If members of a couple have differing expectations about what the holiday season should be like, then the cracks in an unstable relationship may widen. For instance, you may have grown up with the full turkey and cranberry sauce experience and received dozens of expensive gifts. So if your partner just wants a quiet Christmas BBQ and only buys you a small, inexpensive gift, you may feel disappointed or even unloved!

How to avoid this: Good communication is key here. Don’t expect your partner to read your mind – be proactive and tell them exactly what your expectations are. If expectations differ, it’s far more effective to discuss them beforehand, rather than feeling disappointment and resentful when the time comes.

Building Resentment

When one member of a couple is taking on a disproportionate number of duties over the holidays, resentment can quickly build and sour even the strongest relationship. Whether it’s looking after the kids, house work, present shopping, catering to visiting family or anything else, if your partner is not pulling their weight, you may decide you’ve had enough.

How to avoid this: Again, don’t expect your partner to know what you want, while resentment bubbles. Ask them for help if you need it, or ask them if they need help if you’re the one slacking off. Also, try to be empathetic if your partner usually works long hours, because they probably do deserve a rest; however, they also need to understand that you feel the same, so calmly explain this to them.

Shock to the System

If you or your partner work and aren’t usually the primary caretaker of your children, it can be a huge shock to suddenly be spending 24 hours a day with them during your holidays. This can, of course, cause many arguments – especially if your partner isn’t sharing the responsibility equally.

Pressure to play happy families often exposes the cracks in the relationship. It’s much easier to pretend that everything is ok when you can avoid each other in the day to day routine.

How to avoid this: Time flies when you’re having fun, so don’t let the kids run amok out of boredom; instead, plan fun family activities that will keep the kids happy and keep your minds off their small misbehaviours. This doesn’t need to be an expensive endeavour – even just a picnic in the park will be enough to delight your little ones. Communicate about parental responsibilities and compromise on duties.

If you and your partner do experience tension, then take a small break from each other. Maybe go out with friends for the day, or do some shopping alone. Again, hash out any problems with good communication.

Too Much Christmas Cheer

People tend to consume excessive amounts of alcohol and other substances during the holiday season and this can bring about a huge amount of tension into a relationship. Whether it’s because of addiction issues, illicit substance use or something regretful that happens due to one episode of binge drinking, imbibing too much can certainly take the Christmas cheer away!

How to avoid this: This is a tricky one if addiction is involved, but at the very least, try to set a good example by not drinking yourself, or limiting the amount you drink. If there is an addiction problem, you’ll eventually need to address it, regardless of the time of year. If this is the case, avoid events where alcohol or other substances will be present

It’s always a good idea to set a budget for drinks before attending any parties. If you only bring a few drinks, then you are limited to just that. If you’re attending a party where drinks are flowing profusely, ensure you eat a large meal before ingesting any alcohol and drink a glass of water between every alcoholic drink.

Rifts from Reflection

Many people use the time leading up to New Year to reflect on their life so far. For those in unhappy relationships, this may force them to consider whether they really want to continue down the same path, resulting in breakups.

How to avoid this: Unfortunately, there’s not much you can do if your partner is the one reflecting on the negatives; however, if you can see that they are unhappy, ask them to discuss it with you. The things that are huge issues in their mind may be things you’re willing to change with no problems.

If you’re the one reflecting on the negatives, try to remember the positives and why you fell in love with your partner in the first place. Sometimes when our minds are set on a track, it can be difficult to diverge from that line of thought without effort, but forcing yourself to remember the positives may just save your relationship! Discuss the problems you see because there may be a solution. Sometimes the solution is seeking outside help, a counsellor or mediator could help you get through a bumpy patch if both parties are willing.

A weighty problem

Ok, this one is a little far-fetched, but it nonetheless does occur. During the Christmas period, it’s easy to stack on the weight, with all the delicious food and alcohol consumed. Sometimes, this results in feelings of dissatisfaction with the personal appearance of a partner, so they call it quits!

How to avoid this: If you’re the one who feels your partner has become too pudgy, just remember that we all grow old and lose our attractiveness, so if you have problems with their appearance now, what will you do when they start developing wrinkles and sags? If you’re genuinely concerned about their weight for health reasons, encourage them to eat healthy and exercise by doing these things yourself and asking them to join in.

If your partner has decided they no longer want to be with you just because you’ve put on a few kilos (and not because of a genuine concern for your health), then perhaps it’s for the best! Who wants to be with somebody so shallow?

What to do if you’ve tried everything, but the relationship still fails

If your relationship fails despite you and your partner’s best attempts, you’re not alone and it’s ok! Allow yourself the grieving process – don’t feel obliged to put on a happy face for the benefit of others, but also don’t completely isolate yourself. Lean on your friends and family for support.

Keep in mind that holiday breakups aren’t always permanent, but by going through this, you can choose to reflect on what it was that brought you to this point and learn from your mistakes and counselling or mediation could be pursued. If the relationship is beyond help, divorce settlement can be a cooperative and peaceful process and doesn’t need to be expensive either. Whatever you choose, we hope your Christmas is full of love and joy!