Does a Breach of a Prenuptial Agreement Create a Right of Rescission?
In Pennsylvania, under the long-standing authority of Simeone v. Simeone, 525 Pa. 392, 581 A.2d 162 (1990), premarital agreements are inviolate unless there has been a lack of full and fair disclosure. Prior law which required that a prenuptial agreement make a reasonable provision for the dependent spouse has been eliminated. Moreover, the standards for finding a lack of full and fair disclosure are exceedingly difficult to meet, as subsequent case law demonstrates. Yet, where it is not possible to prove a lack of full and fair disclosure, may a contracting party have a prenuptial agreement invalidated by proving a breach of contract?
Under Simeone, prenuptial agreements are governed by the general law of contracts. Thus, it is appropriate to look to general contract cases to determine whether a breach of contract renders the entire contract unenforceable. Clearly, the law abhors a forfeiture where there is an adequate remedy at law. In Widmer Engineering Inc. v. Dufalla, 837 A.2d 459 (Pa.Super.2003), appeal denied, 578 Pa. 701, 852 A.3d 313, the Superior Court adopted the approach of the Restatement 2d of Contracts § 241 to judge whether a breach was so material as to warrant rescission of the entire contract. The Restatement 2d of Contracts § 241 lists the following criteria:
(a) the extent to which the injured party will be deprived of the benefit which
he reasonably expected;
(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
(c) the extent to which the party failing to perform or to offer to perform will suffer
(d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
(e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing. These criteria would preclude rescission of the contract unless it is impossible to cure the breach through specific performance, money damages or other remedies at law. The court might also consider whether the non-breaching party may be precluded by waiver or estoppel from asserting a contractual forfeiture.
Part I of my research will examine the few cases where our Pennsylvania courts have considered an alleged breach of a prenuptial agreement. Part II will examine decisions from other jurisdictions. Those cases suggest that a breach is grounds for rescission of the entire prenuptial agreement only where there has been no partial performance of the promises made in the prenuptial agreement and the breach is so material as to constitute a failure of consideration. Although one Pennsylvania case, Estate of Harrison, supra, might suggest a less stringent standard for invalidating a prenuptial agreement on the grounds of breach, the precedential weight of that decision must be questioned in light of the subsequent Cummings and Barilla decisions that distinguished Harrison and the sweeping changes brought to the law by Simeone.
Part I will be posted later this week; stay tuned.