Prenuptial agreements on property rights of prospective spouses have long been recognizedand enforced in California and are generally favored as a private means of ordering financial affairs.¹ It is a fact of life tha aninherent inequality of some dimension--an age differential, disparity ofwealth, a second marriage for one of the parties, perhaps children froma prior relationship--frequently provides the motivation for intended spousesto enter into a premarital agreement. It is precisely these types of inequalitythat create the possibility of a contract being so one-sided thatt one party later contends it to be unconscionable and thus unenforceable. Yet, in this emotionally and financially sensitive area, California law is frustratingly imprecise.

In re Marriage of Dawley,² the 1976 bench-mark opinion of the California Supreme Court, established the rule that public policy permitsparties to define their marital relationship by contract, that an agreementthat contemplates divorce is not necessarily "promotive of divorce,"and is not, therefore, invalid per se. In Dawley, a couple executed a wnttenpremarital agreement that provided that all property belonging to eitherspouse at the commencement of marriage or acquired by a spouse throughpurchase, gift or inheritance during marriage, including earnings, wouldbe owned by that spouse as his or her respective separate property. Eachdisclaimed all rights, including community property rights, in the propertyof the other mouse. In the subsequent marital dissolution proceeding, thepremarital agreement was upheld and property was confirmed to the partiesby the trial court pursuant to the premarital agreement. The CaliforniaSupreme Court affirmed, stating, in part: Thus in the Dawley marriage thecommunity or separate character of property is not fixed by the presumptionset forth in the Civil Code or by the judicial opinions interprettng those presumptions, but by the terms of the antenuptial contract.³

The supreme court thus upheld the right of a couple to contractuallydefine their relationship and, at the same time, disapproved the dictumin In re Marriage of Higgason,⁴ that stated that there was arequirement of intent of the parties to remain married for an indef-initetime and also emphasized that mutuality of bargaining power is a key factorin the validity and enforceability of such agreements.⁵ Dawleyalso set forth the public policy background of California's Uniform PremaritalAgreement Act.

Under the Uniform Premarital Agreement Act,⁶ a premarital agreement is not enforceable if the party against whom enforcement is soughtproves that the agreement was unconscionable when it was executed and establishescertain facts with respect to lack of disclosure prior to execudon of theagreement.⁷ The burden of proof is on the party who allegesthat the agreement is unenforceable.⁸ The issue of unconscionabilityis decided by the court as a matter of law pursuant to Family Code Section1615(b).

In marked contrast to the provisions of the Uniform Premarital AgreementAct, California Civil Code Section 1670.5 codifies the general contractdoctrine of unconscionability and provides a different test to determineif a contract is unenforceable: whether, in light of the general backgroundand needs of the particular case, the provisions involved are so one-sidedas to be unconscionable under the circumstances existing at the time ofthe making of the contract. This general contract definiffon of the doctrineof unconscionability has also been codified by the legislature in CommercialCode Section 2-302.

In addition to these statutory standards of unconscionability, caselaw has established other tests required to find a contract unconscionableand thus unenforceable.⁹ Three distinct different standardsof the doctrine of unconscionable contracts therefore now exist in California

1) The California Uniform Premarital Agreement Act;

2) Contract law codified in Civil Code Section 1670.5 and CommercialCode Section 2-302; and

3) Judicial interpretation embodied in case law.

This means that California law provides three different mechanisms totest whether a prenuptial agreement is unconscionable and therefore unenforceable.As a result, the standards for measuring the enforceability of Californiaprenupffal agreements are far from precise. This imprecision betveen statutoryprovisions and case law interpretation creates ambiguity not only in thenegotiation and drafting of prenuptial agreements but, more important,in the ultimate test of their enforceability.

The history of the doctrine of unconscionability of contracts has been welldocumented;¹⁰ it is a doctrine that applies to all contracts.¹¹ As such, unconscionability, as defined by general contract law, is applicableto California premarital agreements, although, surprisingly, no reported California case has applied an unconscionability standard to a prenuptial agreement.¹²

Civil Code Section 1670.5 does not expressly define unconscionability;instead, it provides the court with authority to rule directly on the unconscionabilityof a contract or a particular clause of a contract and to render a legalconclusion as to its unconscionability. The Legislative Committee Commentto Civil Code Section 1670.5 explains the basic test for a court to determineunconscionability "The basis [sic] test is whether, in light of thegeneral background and the needs of the particular case, the clauses involvedare so one-sided as to be unconscionable under the circumstances existingat the time of the making of the contract."¹³

The Restatement (Second) of Contracts Section 208 mirrors the provisionsof Civil Code Section 1670.5. The comments to the Restatement provide relevantfactors to determine whether a contract or a material contractual termis unconscionable. One such factor is the weakness in bargaining power.In this regard, Comment (d) states:

A gross inequality of bargaining power, together with terms unreasonablyfavorable to the stronger party, may confirm indications that the transactioninvolved elements of deception or compulsion, or may show that the weakerparty had no meaningful choice, no real alternative, or did not in factassent or appear to assent to the unfair terms.

Civil Code Section 1670.51(b) further provides that the parties shallhave the opportunity to present evidence on the "commercial settlng, purpose, and effect" of the contract in order "to aid the courtin making the determination." This invitation to present evidenceis limited by the rules of evidence with respect to the admissibility orinadmissibility of parol evidence. Recent case law makes clear that parolevidence is inadmissible to prove a meaning to which contract languageis not reasonabb susceptible.¹⁴

Two alternative approaches to determine whether a contract is unconscionable,and therefore unenforceable, have emerged from applying Section 1670.5in California case law. Under the first approach, established in Grahamv. Scissor-Tail, Inc, the initial component of the analysis is to determinewhether the contract is one of adhesion.¹⁵ Since even a contractof adhesion may be enforceable, the next step is to determine whether enforcementshould be denied for either of two reasons: 1) the contract, or one ofthe contract's provisions, falls outside the reasonable expectations ofthe weaker party; or 2) the contract, or one of the contract's provisions,falls within the reasonable expectations of the weaker party, but is undulyoppressive or unconscionable.¹⁶

Under the second approach provided by case law, established in A &M Produce Co. v. FMC Corporation, the determination of what renders thecontract or contractual provision unconscionable and, thus, unenforceable,is based upon the definition of unconscionability in Civil Code Section1670.5.17 In analyzing the applicability of Section 1670.5, it must bekept in mind that this section did not create an affirmative cause of action,but was intended to codify the defense of unconscionability.¹⁸Unconscionability is determined by both procedural and substantive components.¹⁹Substantive unconscionability refers to the actual terms of the agreement,while procedural unconscionability pertains to the bargaining process.²⁰

The California Supreme Court attempted to harmonize these two approachesin Perdue v. Crocker National Bank. The court said, "Graham u Scissor-Tail,Inc. comports somewhat more closely to the California precedent; A&MProduce conforms more closely to the Uniform Commercial Code and the casesdecided under that code. Both pathways should lead to the same result."²¹

Graham v. Scissor-Tail, Inc. arose out of a series of four concert promotioncontracts executed on standardized forms supplied by the American Federationof Musicians. At issue in the contractual dispute was the sharing of lossesincurred from the initial two concerts. The supreme court determined thatthe contract was a contract of adhesion but pointed out that a contractof adhesion is fully enforceable according to its terms unless the contractis unconscionable. The contract would be unconscionable if either 1) theterms do not meet the reasonable expectations of the weaker parb; or 2)even if they do, the terms are unduly oppressive or unconscionable. Thesupreme court held the contracts in Graham to be unconscionable and, assuch, unenforceable.

In A & M Produce, a contract drafted by the seller, a large corporation,was found to be unconscionable and therefore unenforceable in light ofthe totality of the circumstances, the inequality of bargaining power,lack of negotiation, disclaimer of warranties, and the exclusion of consequential damages. To discern the nature of unconscionability, the court definedtwo elements of unconscionability: the "procedural" element andthe "substantive" element.

The procedural element of unconscionability focuses upon the factorsof oppression and surprise. Oppression is found to arise "from aninequality of bargaining power which results in no real negotiation and‘an absence of meaningful choice.’"²² The element of surprisecomes into play where "supposedly agreed-upon terms of the bargainare hidden in a prolix printed form drafted by the party seeking to enforcethe disputed terms."²³

Procedural unconscionability alone will not provide a basis to denyenforcement of a contract; substantive unconscionability must also be found.The A & M Produce court noted that a contractual term would be substantivelysuspect if the risks of the bargain were reallocated in an objectivelyunreasonable or unexpected manner. Not all unreasonable risk allocationsare unconscionable; thus, enforceability of a contract clause is tied tothe procedural aspects of unconscionability such that the greater the unfairsurprise or inequality of bargaining power, the less unreasonable the riskallocation. The court further noted that substantive unconscionabilitymust be evaluated at the time the contract is made.

In A & M Produce, the court interpreted the essential purpose ofCivil Code Section 1670.5 and held that the doctrine of unconscionabilityis to apply to all contracts, not just those arising under the CommercialCode. The court determined that unconscionability is a doctrine fundamentalto the operation of contract law, irrespective of the particular application.In apparent recognition of this fact, the legislature's decision to adoptUniform Commercial Code Section 2302 codifies the unconscionability doctrinein Civil Code Section 1670.5, applicable to all types of contracts, ratherthan as part of the Commercial Code.²⁴

In recent cases, courts have applied the principles established in theGraham and A & M Produce decisions. A court may find a contract unconscionableby applying either standard, but it does not have to reach the same resultunder both tests.²⁵ In Patterson v.ConsumerFinancial Corp.,²⁶for example, the court applied both tests, and under each the subject contractswere found to be unconscionable. In Ellis v. McKinnon Broadcasting Co.,²⁷the court applied only the A & M Produce test and found the commissionforfeiture provision of an employment contract unconscionable. In CaliforniaGrocers Association, Inc. v. Bank of America,²⁸ the A &M Produce approach was rejected and the contract in question was held notto be unconscionable. Reviewing prior case law concerning unconscionability,the California Grocers court determined that the proper test is whetherthe contract in question "shocks the conscience." The trial courtdecision in Buchwald v. Paramount Pictures shocked the entertainment communitywhen the trial judge ruled that Paramount had imposed a contract with unconscionableterms; the court reformed the agreement to reach a just result.²⁹

In Patterson, the court of appeal affirmed a trial court decision holdingan arbitration clause in a standard loan agreement unconscionable and unenforceable.³⁰The court first analyzed the facts according to the Graham model and foundthat the contract was indisputably one of adhesion. Plaintiffs were individualsof modest means, some self-employed or temporarily unemployed, who borrowedsmall amounts of money in response to advertising promising guaranteedloans. Next, the court analyzed whether the adhesion contract was consideredto be within the reasonable expectations of the parties and held that itwas not. Thus, applying the Graham test, the court held that the contractswere adhesive, unconscionable, and therefore unenforceable.

The court also found the contracts unenforceable under the alternativeanalysis of applying the A & M Produce test of Civil Code Sechon 1670.5.The court found the contract, in fact, to be both procedurally unconscionableand substantively unconscionable.

Thus, under both the Graham and the A & M Produce approach, theresult was the same: the arbitration clause was held unconscionable andunenforceable.

In Ellis, the court determined that a commission forfeiture provisionin an employment agreement between a salesman and employer was unconscionableand unenforceable.³¹ In its analysis of procedural and substantiveunconscionability, the court noted that a compelling case of substantiveunreasonableness will overcome a relatively weak showing of proceduralunconscionability.³²

The California Grocers court expressed its preference for the Grahamv. Scissor-Tail approach in holding that a depositor's contract with abank was not unconscionable. In declining to use the A & M Produceapproach, the court adhered to what it called "the traditional standardof unconscionability."³³ The court followed the Grahamapproach by focusing on the oppressiveness of the contract, utilizing a "shocks-the-conscience" standard.

The California Grocers decision has been criticized for allegedly undercuttingthe doctrine of unconscionability by essentially disregarding the necessityfor any showing of procedural unconscionability.³⁴

And so the judicial uncertainty with the concept of unconscionabilitycontinues, providing little grudance for drafters of contracts and leavingfuture problems of enforceability unresolved. This confusing pattern formedthe background of the trial court decision in Buchwald v. Paramount PicturesCorp., after which another trial court, called upon to interpret a similarprofit-participation agreement, adopted a different approach and held thatthe contract at issue was not unconscionable.³⁵

Prenuptial agreements executed before January 1, 1986, are governed by the law ineffect prior to the enactment of the Uniform Premarital Agreement Act.³⁶The validity of a pre-1986 premarital agreement is usually judged by thegeneral contract principles of understanding, fairness, and mutual assent.³⁷Accordingly, the unconscionability of a pre-1986 agreement is determinedby the general doctrine of unconscionability as defined in Graham and A& M Produce. In this regard, the discussion of "undue influence"is the most relevant facet of pre-1986 case law in determing the unconscionabilityof premarital agreements. Undue influence, which is closely related tounconscionability and is arguably the same, is defined in Civil Code Section1575 as follows:

1. In the use, by one in whom a confidence is reposed by another, orwho holds a real or apparent authority over him, of such confidence orauthority for the purpose of obtaining unfair advantage over him;

2. In taking an unfair advantage of another's weakness of mind; or,

3. In taking a grossly oppressive and unfair advantage over another's necessitiesor distress.³⁸

Cases dealing with undue influence involve the exertion of pressureby a party with superior bargaining power over a weaker party to sign apremarital agreement." The coercion in this instance is arguably thesame as that involved in adhesion contracts where the inequality of bargainingpower is the focus of the doctrine of unconscionability. For example, inIn re Marriage of Dawley, the court found that there was no undue influence,that the parties entered the premarital agreement freely and voluntarily,and that there was an equality of bargaining power. As a result, the agreementwas neither oppressive, nor unfair, and was upheld.⁴⁰

The court's reasoning in affirming the agreement's validity involvedan analysis of the two parties' respective bargaining power. Such an analysisbecomes necessary when a party attempts to overturn a premarital agreementby alleging it to have been procured by undue influence.⁴¹ Therefore,when apremarital agreement entered into prior to 1986 is at issue, thepre-1986 family law cases and general contract principles regarding unconscionability,as explained in A & M Produce Co. v. FMC Corp. and Graham v. Scissor-Tail,Inc., should be revisited and reviewed.

On January 1,1986, the California 'Uniform PremaritalAgreement Act took effect.It declares that an unconscionable premarital agreement will not be enforcedand indicates that for a premarital agreement to be unconscionable, itmust have been so when executed. Additionally, all of the following mustbe true for the party challenging the agreement:

(A) He or she was not provided a fair and reasonable disclosure of theproperty or financial obligations of the other party.

(B) He or she did not voluntarily and expressly waive, in writing, anyright to disclosure of the property or financial obligations of the otherparty beyond the disclosure provided.

(C) He or she did not have, or reasonably could not have had, an adequateknowledge of the property or financial obligations of the other party.⁴²

This standard, codified in Family Law Section 1615(b), differs significantlyfrom the standard of Civil Code Section 167Q5 because it defines unconscionabilitylargely in terms of financial disclosure. Under this standard, neitherthe inherent fairness of the premarital agreement nor the equality of theparties' bargaining power are given weight.

Only one California case has considered a prenuptial agreement on thebasis of the disclosure standard of the Uniform Premarital Agreement Act.However, this case did not actually judge the validib of the agreementbecause the wife did not allege that the agreement was unenforceable underthe Uniform Premarital Agreement Act."⁴³

With no California case to serve as a guide, the application of theUniform Premarital Agreement Act can be gleaned from a case arising inTexas, where virtually identical language was enacted into law. In Chilesv. Chiles,⁴⁴ the Texas Court of Appeal applied the factors established in the act to determine the validity of a premarital agreement. The partieswere married in 1985 and signed a premarital agreement approximately two weeks before the ceremony. The premarital agreement stated that it wasthe parties’ intent that during their marriage they would not own any community property. The parties separated almost two years later, and the trial courtfound that the premarital agreement was invalid because the agreement was unfair.

The court of appeal, however, modified the trial court's decision becausethe issue was not the unfairness of the agreement, but the factors setforth in the Uniform Premarital Agreement Act, i.e., the voluntary executionof the agreement, its unconscionability, and adequate disclosure. The courtof appeal found that the premarital agreement was valid because there wasno evidence that the agreement was involuntarily executed. The party seekingto invalidate the agreement was represented by counsel in extensive negotiationsand drafts of the agreement. The agreement was also valid because therewas no evidence that it was unconscionable or that there was inadequatedisclosure.⁴⁵

Similarly, in DeLorean v. DeLorean,⁴⁶ a New Jersey case applying California law and the Uniform Premarital Agreement Act, the court found the agreement valid based upon its analysis of California law and whatwas considered adequate disclosure, despite the bargaining disparities between the parties. The groom, 25 years older than the bride, was a seniorexecutive of General Motors; the bride was in the modeling and entertainmentindustry. A few hours before the parties’ wedding in California, the groomrequested the bride to sign a premarital agreement that provided that therewould be no community property. The agreement also provided that it would be construed under the laws of California The only disclosure involvedwas the information stated in the agreement that "Husband is the ownerof substantial real and personal property and he has reasonable prospects of earning large sums of monies; these facts have been fulb disclosed toWife."⁴⁷

The bride was represented only by the groom's friend, an attorney, whoadvised her not to sign the agreement. The bride signed the agreement anyway,and the parties remained married for 13 years. The court held that theagreement was valid because the agreement was voluntarily signed, was notunconscionable, and adequately disclosed assets and liabilities. The courtreasoned that the "general idea of the character and extent of thefinancial assets and income of the other" spouse "is aufficientin California"'⁴⁸. The New Jersey court thus found, applyingthe California Uniform Premarital Agreement Act, that only minimal disclosureis required.'⁴⁹

In Marriage of Leathers⁵⁰ the bride quit her job and movedwith her children into her perspective husband's home in anticipation ofmarriage. The parties had discussed the possibility of a premarital agreementabout two years before marriage, but the husband did not present the agreementuntil the eve of the wedding. The husband’s attorney advised the wife thatthe intent of the agreement was to protect the property the husband wasbringing to the marriage, that the agreement would have no legal effectif the parties remained married for more than a few years, and that theagreement did not apply to property acquired after marriage.

The Oregon Supreme Court noted that the parties never discussed thespecifics of the agreement and that the husband, who sought and approvedthe agreement, never advised his prospective wife of the consequences ofher rights in absence of the agreement.

As a practical matter, [the wife] had no time to consult independentcounsel. She had committed her family's future to the marriage by quittingher job and moving into a home acquired by [the husband] in contemplationof the marriage. If the marriage did not take place, her financial conditionand the children's future would be precarious. She had been involved withhusband for several years and, it was reasonable to assume, was anxiousthat there should be no impediment to the marriage.⁵¹

The court stated, "This premarital agreement probably would bean adhesion contract in the business arena under analogous circumstances;it is lopsided, between parties of greatly different bargaining power,and presented for execution down the barrel of a premarital shotgun. Surelythe fiduciary relationships of the parties in this case demand a higherstandard of conduct than a business relationship and than that approved by the lower courts here."⁵²

Prospective spouses seeking to minimize future potential disagreementsby ordering their personal and property relationships in prenuptial agreementsshould not later face questions of enforceability clouded by conflictingdoctrines of law. The imprecision in the law does little for the sanctityof contracts and the confidence of those who rely upon prenuptial agreementsin entering into the marriage contract itself. The California legislatureshould act to resolve these inconsistences. In the absence of legislativeaction, attorneys, by recognizing the potential problems of enforceability,can counsel their clients in drafting agreements (see "A Model Contract," below) that avoid the pitfalls of current Californialaw.

¹ In re Marriage of Dawley, 17 Cal. 3d 342 (1976).
² Id.
³ Id at 357.
⁴ In re Marriage of Higgason, 10 Cal. 3d 476 (1973).
⁵ Dawley, 17 Cal. 3d at 351­52.
⁶ FAM. CODE §§3,1600, 1601,1610­1617 (formerly, CIV. CODE§§5300-5317), operative Jan. 1, 1986, and applicable to agreementsexecuted on or after that date.
⁷ See, FAM. CODE§1615(a) (2) (A) to (C).
⁸ In re Marriage of Iverson, 11 Cal. App. 4th 1495 (1992).
⁹ See Unconscionability in California: A Need for Restraintand Consistency, 46 HASTINGS L. J. 459­554(1995).
¹⁰ See Dando B. Cellini & Barry L. Wertz, Comment,Unconscionable Contract Prouisions: A Hlistory of Unenforceability fromRoman Law to the UCC, 42 TUI., L. Rev 193 (1967);46 HASTINGS L. J. 459, n. 14, 32.
¹¹ A & M Produce Co. v. FMC Corp.. 135 Cal. App. 3d 473(1982). But see Spinello v. Amblin Entertainment, 29 Cal.App. 4th 1390,1392 (1994) (court holds that "the rules of proceduraland substantive unconscionability relied on by the trial court have nothingto do with the enforcement of an agreement to arbitrate.")
¹² Two California appellate cases within the past decade haveheld foreign, religion­based prenuptial agreements void and unenforceableas being against public policy. See In re Marriage of Noghrey, 169Cal. App. 3d 326 (1985); In re Marriage Dajani, 204 Cal. App. 3d 387 (1988).
¹³ CIV. CODE §1670.5(a)states: "(a) If the court as a matter of law finds the contract orany clause of the contract to have been unconscionable at the timeit was made the court may refuse to enforce the remainder of the contractwithout the unconscionable clause, or it may so limit the application ofany unconscionable clause to avoid any unconscionable result."
¹⁴ Consolidated World Investments. Inc. v. Lido Preferred Ltd.,9 Cal. App. 4th 373 (1992); Alling v. Universal Mfg. Corp.. 5 Cal. App.4th 1412 (1992).
¹⁵ Graham v. Scissor­Tail, Inc., 28 Cal. 3d 807, 819 (1981).Graham v. Scissor­Tail, Inc. is the preeminent case applying the unconscionabilitydoctrine in California after the adoption of COM.CODE §2­302 in 1979. 46 HASTINGSL. J., supra note 9, at 502.
¹⁶ Graham, 28 Cal. 3d at 820. A contract of adhesion is a standardizedcontract. "which, imposed and drafted by the party of superior bargainingstrength, relegates to the subscribing party only the opportunity to adhereto the contract or reject it....Such an agreement does not issue from thatfreedom in bargaining and equality of bargaining which are theoreticalparents of the American law of contracts. General contract law posits inequalityof bargaining power as the focal point of the doctrine of unconscionability.The concept of adhesion contracts has grown rapidly in recent years asa basis for modifying or nullifying harsh terms which defeat the reasonableexpectations of the parties." Dean Witter Reynolds. Inc. v. SuperiorCourt. 211 Cal. App. 3d 758 (1989).
¹⁷ A & M Produce Co.. 135 Cal. App. 3d at 486.
¹⁸ Dean Witter Reynolds, Inc v. Superior Court, 211 Cal. App.3d 758 (1989).
¹⁹ A & M Produce Co., 135 Cal. App. 3d at 486.
²⁰ See 46 HASTINGS L.J., supra note9, at 472.
²¹ Perdue v. Crocker National Bank, 38 Cal. 3d 913, 925 n.9(1985).
²² A & M Produce Co., 135 Cal. App. 3d at 486 (quotingWilliams v. Walker­Thomas Furniture Co., 350 F. 2d 445, 449 (1965)).

²³ A & M Produce Co., 135 Cal. App. 3d at 486.
²⁴ Id at 487, n.12; United States Roofing, Inc. v. CreditAlliance Corp., 228 Cal. App. 3d 1431 (1991).
²⁵ Continuing Education of the Bar, Comment, Court AppliesDual Unconscionability Analysis to Defeat Provision Requiring ArbitrationUnder National Arbitration Forum Rules, CAL BUS.LAW REP., July 1993, at 23.
²⁶ Patterson v. ITT Consumer Fin. Corp., 14 Cal. App. 4th 1659(1993).
²⁷ Ellis v. McKinnon Broadcasting Co., 18 Cal. App. 4th 1796(1993).
²⁸ California Grocers Association v. Bank of America, Cal. App.4th 205 (1994).
²⁹ Buchwald v. Paramount Pictures Corp., LA. Sup. Ct. Case No.C706083. The trial court issued three Statements of Decision: First Phaseon Jan. 8,1990, which decided that the movie was based on Buchwald's treatment;Second Phase on Dec. 21,1990, which decided that certain terms in the netprofit participation agreement were unconscionable; and Third Phase onMar. 16, 1992, which decided the amount of damages due to Buchwald andBernheim under the reformed contract An the decisions are reprinted asappendices in PIERCE O'DONNELL& DENNIS McDOUGAL, FATALSUBTRACTION: THE INSIDESTORY OF BUCHWALDv. PARAMOUNT PICTURES (1992).See also 46 HASTINGS L J., supra note9, at 524.
Art Buchwald and Paramount Pictures recently settled their long­pendingcase; the court of appeal issued a brief order on Aug. 23, 1995, in whichit vacated the judgment d at had been entered against Paramount and remandedthe action to die trial court with directions to "set aside the judgmentand dismiss the action with prejudice pursuant to the parties' stipulationand settlement."
³⁰ Patterson, 14 Cal. App. 4th at 1169.
³¹ Ellis, 18 Cal. App. 4th at 1803.
³² Id. at 1805 (citing. Carboni v. Arrowspide,2 Cal. App. 4th 76, 86 (1991)).
³³ California Grocers Association, 22 Cal. App. 4th at 214-215."The traditional standard of unconscionability, as set forth in Osgoodv. Franklin (1816 N.Y.Ch.) I Johns. Ch.l, 21, is that 'the inequality amountingto fraud must be so strong and manifest as to shock the conscience andconfound the judgment of any man of common sense.'"
³⁴ Continuing Education of the Bar, Unjustified Restraintson Unconscionability Doctrine, CAL. BUS.LAW REP., June 1994, at 236.
³⁵ ENT. L. REP., Sept.1994, at 3 (summarizing and reprinting the court decision in BatfilmProductions v. Warner Brothers, Inc., L.A Sup. Ct. Case Nos. BC051653 &BC051654 (Mar. 14,1994); See 46 HASTINGS LJ.. supra note 9, at 535.
³⁶ FAM. CODE §1503.In re Marriage of Dajani, 204 Cal. App. 3d at n.4.
³⁷ CIV. CODE §1550;Wenke & O'Hare, Antenuptial Agreements: Litigating Their ValidityUpon Dissolution of Marriage, 6 ORANGE CTY.B. J. 216, 219 (1979).
³⁸ CIV. CODE §1575.
³⁹ See In re Marriage of Saslow, 40 Cal. 3d 848 (1985);In re Marriage of Dawley, 17 Cal. 3d 342. See generally O'Neil v.Spillane, 45 Cal. App. 3d 147 (1975) for a discussion of undue influence.
⁴⁰ In re Marriage of Dawley, 17 Cal. 3d at 355.
⁴¹ See CIV. CODE§1575; Dawley, 17 Cal. 3d at 355; Estate of Sayegh, 118 Cal. App.2d 327 (1953); Fernandez v. Fernandez, 194 Cal. 2d 782 (1961).
⁴² FAM. CODE §1615(a)(2) (A) to (C).
⁴³ Estate of Gagnier, 21 Cal. App. 4th 124 (1993).
⁴⁴ Chiles v. Chiles, 779 S.W. 2d 127,129 (1989); TEX.FAM. CODE §546.
⁴⁵ Chiles, 779 S. W. 2d at 129.
⁴⁶ DeLorean v. DeLorean, 511 A. 2d 1257 (1986).
⁴⁷ Id. at 1260.
⁴⁸ Id. at 1262.
⁴⁹ Id. at 1264. Although this case summarizes Californialaw and provides that minimal disclosure is adequate, better practice wouldbe to disclose all assets and liabilities as an exhibit attached to thepremarital agreement.
⁵⁰ Marriage of Leathers, 309 Ore. 625, 789 P. 2d 263 (1990).
⁵¹ Id. at 631.
⁵² Id. at 632.

Model Clause for a California Prenuptial Agreement

Careful practitioners can avoid the uncertaintyof enforcing prenuptial agreements caused by inconsistencies in Californialaw through creative drafting techniques. Until the California legislatureacts to resolve these inconsistencies, the following clause should be consideredfor inclusion in all prenuptial agreements:

A. This agreementis executed within the State of California and shall be subject to andinterpreted under the laws of the State of California.

B. Thisagreement is intended to and shall be governed by the California UniformPremarital Agreement Act (Family Code Sections 3, 1601, 1610-1617) andapplicable California statures and case law.

C. Theparties expressly acknowledge and agree, in conformity with CaliforniaFamily Code Section 1615, that this Agreement is being executed by theparties voluntarily, that neither party waived in writing the right todisclosure of the property or financila status and obligations of the otherparty, and that both parties had adequate knowledge of the property andfinancial obligations of the other party.

D. The parties expresslyacknowledge and agree

1) This Agreement and its terms are not standardizednor are the provisions hereof imposed or drafted by a party with superiorbargaining power;

2) The parties to this Agreement each had theopportuinty to negotiate, and did in fact negotiate, the terms and provisionsof this Agreemet;

3) The terms and provisions of this Agreementare within the reasonable expectations of the parties with respect to thesubject matter of this Agreement;

4) This Agreement and its terms are not one-sided,harsh, oppressive, surprising, or unfair for either party with respectto the subject matter of this Agreement;

5) The parties to this Agreement each had substantiallyequal bargaining power in negotiating the terms of this Agreement and inmeaningfully choosing to enter into this Agreement;

6) The agreement of the parties and all of itsterms and provisions are clearly set forth in the Agreement.

E. Although this Agreementis executed in the State of California, and makes reference to separateand community property (and quasi-community property, if applicable), theparties expressly agree that it is their intent that this Agreement coverall rights and property, real or personal, whether such property is situatedwithin or without the State of California, or within or without the UnitedStates of America.

Go to Top >>