Previous posts regarding prenuptial agreements have discussed the validity of premarital agreements in very general terms, focusing on the broad concepts of procedural and substantive unfairness. Procedural unfairness creates a very real risk that the agreement might not be enforced. Substantive unfairness is not so important, but it can create risk when the unfairness is extreme, or when the procedural fairness of the agreement is a close question.
This post will take a look specifically at the law of North Carolina. Twenty-seven states, including North Carolina, have enacted the Uniform Premarital Agreement Act (“UPAA”), a draft statute written by the Uniform Law Commission to standardize the law of premarital agreements.
The key statute governing the validity of premarital agreements is N.C. Gen. Stat. (“G.S.”) § 52B-7. Under that statute, there are two distinct grounds upon which a premarital agreement can be successfully attacked.
The first ground provides that the agreement is invalid if the party attacking the agreement “did not execute the agreement voluntarily.” Id. § 52B-7(a)(1). There is no statutory definition of involuntariness; the issue is left entirely to the courts. This ground is where the procedural fairness of the agreement becomes critical. If procedural unfairness reaches critical mass, the agreement will be deemed involuntary and the court will not enforce it. The fourth post in this series discusses procedural unfairness in more depth.
The second ground is more complex. It requires, to begin with, that the agreement be unconscionable. Unconscionable means, in effect, extremely unfair. One can see, again, the critical importance of procedural and substantive fairness in determining the enforceability of the agreement.
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