Can you trust family members?

A written agreement could even save your family

A written agreement could even save your family

My last blog post discussed the massive advantages of having an agreement in writing – a written agreement helps avoid disputes and makes it more likely that any dispute will be resolved in your favour.

However, we often like to believe that agreements with family do not need to be written agreements. After-all, members of families are supposed to be nice to each other, and always act honestly towards each other. Blood is thicker than water, right?

You would be surprised how many times as a lawyer I have come across cases where people have trusted their family and that has resulted in disaster. Consider the following two cases I have encountered:

1)      An elderly man and his niece live in the same house in which they were joint tenants. According to the niece, they struck an agreement when they bought the house that she would look after him in his old age, and in return when he passed away she would receive his half share. Years later, they have a falling out, and the elderly man severs the joint tenancy. The niece comes to see me after the elderly man commences court proceedings to have the house sold. The old man denies their agreement, making it a question of whose word to believe. The uncertainty results in a settlement, with the house being sold and the proceeds divided 50/50.

2)      Two brothers inherit a half share each of a property from their parents. According to the eldest brother, they made an oral agreement whereby the youngest brother would live in the house for 18 months and pay the eldest brother a small weekly amount in rent. At the end of the 18 months, the younger brother would move out and the eldest brother would have his turn at living in the property and paying rent. After living in the property for 18 months, the younger brother refuses to move out and denies the substance of the agreement, leading to proceedings in the Magistrates Court. After a trial, the Magistrate prefers the evidence of the younger brother and allows him to live in the property indefinitely.

If in either case the agreement made between the family members had been reduced to writing, it is unlikely that a dispute would have arisen at all.

The lesson here is quite clear: that you cannot trust family members as much as you would like to. As a result, you would be well advised to get a written and signed agreement with a member of your family in order to protect your interests.

Furthermore, if a dispute arises with a member of your family because there was no written agreement, you lose a lot more than just the money you invested or the work you performed. Obviously you would also lose that relationship as well. This would weaken the family and result in long-lasting bitterness which can affect your wellbeing.  You have a lot more to lose with family members which is why it even more important that important agreements with them are in writing.

It should also be noted that having a written agreement with a spouse or family member can assist in persuading a court that the parties intended their agreement to create legal relations. Such an intention is a requirement for the formation of a legally binding contract: see Balfour v Balfour. If spouses or family members have a written agreement, the court is more likely to be satisfied that there was an intention to create legal relations and therefore to uphold the agreement.

It is strongly recommended that any major agreements you have with members of your own family are written, to avoid loss of money, time, effort and family.

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