Family finances on divorce - when is an agreement reached binding?

If parties have reached an agreement how to divide their finances during a divorce, a solicitor will usually prepare a consent order mirroring the terms reached and send this to the court for approval.  The consent order being sealed by the court is the final stage to bring the financial claims to an end. 

However, it is often overlooked that the agreement reached can be binding even before the order is sealed by the court. 

If one party attempts to resile from the agreement before it has been approved by the court, the party who wishes to rely on the agreement may issue an application for notice to show cause. This is an application to explain to the court why the agreement should not be relied upon. 

This can be done whether or not the agreement reached between the parties was in writing (although being in writing would assist for evidential purposes). 

The case of Xydhias v Xydhias [1999] held that even an agreement reached during negotiations can be binding, even where the parties have not reached a final agreement about all the points of their case. If the only remaining issues are issues of drafting, detail or implementation of the court order, this would suggest a Xhydias agreement has been reached.

Therefore, if a party tries to resile from an agreement before it is sent to the court, there are legal avenues that can be pursued in order to hold the other party to the agreement reached. 

If you would like any further information or advice in relation to financial agreements on divorce, our specialist family lawyers are happy to help. Our lawyers have offices based in Wolverhampton and Cradley Heath and provide assistance to clients across the West Midlands including: Stourbridge, Kidderminster, Birmingham, Dudley and Walsall. 

For all new enquiries, please call 01902 328 355 or 01384 340569, alternatively you can complete our online enquiry form and a member of our team will respond.