Settlement Agreements in Mutual Divorce; Here's All you Need to Know

June 07, 2021
By Advocate Chikirsha Mohanty

What is Mutual Divorce?

Divorce is the act of ending the institution of marriage which existed between two parties. All mutual obligations cease between the parties to the marriage and putting an end to all ties they are to live separately after the divorce.

The laws dealing with divorce are a set of personal laws like the Hindu Marriage Act,1955 for Hindus and includes Sikhs, Jains and Buddhists. Whereas the Christians are governed by the Indian Divorce Act and Muslims are governed by Personallaws of Divorce and also the Dissolution of Marriage Act,1939 and the Muslim Women (Protection of Rights on Divorce) Act,1986. The same way Parsis are governed by Parsi Marriage & Divorce Act,1936. Additionally, other marriages are governed by the Special Marriage Act,1954.

Under the Hindu Marriage Act,1955 the concept of divorce by mutual consent is expounded under Section 13-B. However, 13B (1) states that there are three requirements to be fulfilled if the parties are filing for a divorce via mutual consent before the court. They are as follows:

  • The parties have been residing separately for a span of 365 days or one year,

  • They have not been capable of living together,

  • The parties have mutually agreed that the marriage should be dissolved.

It also states that at the motion made by means of each the events not earlier than 6 months after the date of presentation of the stated petition and no longer later than 18 months of the stated date, the court on being satisfied after hearing both the parties and after making such an inquiry as it thinks fit, pass a decree of divorce which dissolves the marriage via mutual consent.

The period of 6 to 18 months is given as an opportunity for the parties to reflect on their decision.

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What is a Settlement Agreement?

A settlement agreement is a legally binding contract which aims to resolve all the disputes among all parties. It is an agreement made in advance on an outcome before there is any judgement passed on it. Such agreements could bean end result formed via mediation rather than a long awaiting trial. However, the court has to approve the settlement so formed. Settlement agreements help the parties be content with the outcome they have chosen.

Like any type of contract, there are some requirements for settlement agreements to be valid. They are as follows:

  • An offer which is made by one party

  • The acceptance of such terms of the offer made by the other party

  • A reasonable and valid consideration

  • Mutual and free assent given by the parties

  • It must contain a legal purpose

What is a Divorce Settlement Agreement?

A divorce settlement agreement is a legal agreement which is prepared before the parties ahead of mutual divorce proceedings. Such an agreement contains all the terms and conditions of their separation.

If it is enforced in a legal fashion then it is deemed to be a legally binding document on all the parties involved.

Consult:Top Divorce Lawyers in India

Why is it Important to make a Settlement Agreement in Mutual Divorce?

It is always recommended to make a settlement agreement in a mutual divorce because it is a legally binding agreement. So, if any party is not complying by the terms of the agreement, then once the court passes such an agreement, it will be seen as a breach of contract.

It is an essential document that helps in regulating and settling the marital conflicts between the couple. It also brings a lot of clarity on several issues which might arise after the relationship between the parties come to an end.

It also proves to the court that each and every issue was well thought out and hence it can save a lot of time in the decision-making process for the court.

It also helps in avoiding intricate matters whose decision making might need the parties to deliberate on it at a later stage which may make things a lot bitter. Hence, it is always recommended to make a settlement agreement before mutual divorce proceedings and leave no space for any ambiguous decisions in the future because putting an end to any relationship can be very overwhelming and sometimes taxing.

Is making a Settlement Agreement in Mutual Divorce absolutely necessary?

While it is not necessary, makinga settlement agreement in a mutual divorce has its advantages and is always recommended for the reasons mentioned above. A mutual divorce will be valid even when no settlement agreement has been enetered into. However, its benefits are numerous and ensures peace of mind in the longer run.

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Procedure to make a Settlement Agreement in MutualDivorce

A basic procedure is involved in making a settlement agreement for Mutual Divorce. A lawyer will guide you through it, based upon the facts and circumstances of particular case.

  1. Hire an efficient civil or a divorce lawyer- While this is not absolutely necessary it is very much advised to do so.

  2. Separation before filing for the divorce- the parties must be living separately for a year 13B of the Hindu Marriage Act, 1955, Section 28 of the Special Marriage Act and Section 32-B of the Parsis Marriage and Divorce Act, 1936. The period of separation is of two years under Section 10A of the Indian Divorce Act, 1869.

  3. Prepare a set list of issues that might require negotiations- Some issues maybe very conflicting so make sure you are knowing what to discuss and make terms and conditions on that.

  4. Gather important documents- These documents could be anything which can range from your bank statements to documents related to your property. Anything which can validate your points should be carried as it helps during negotiations.

  5. Mental preparation- A settlement agreement is essentially enumerating terms on issues which can arise in the future as well so it can be a very tedious process. It is also very important that you approach this process with a rested mind which is open to a discussion. It should not be a hard bargaining process. It involves negotiations so do make sure to listen to the other party as well.

    Consult:Top Divorce Lawyers in India

Objective of Settlement Agreements in a Mutual Divorce

There is a need of negotiations amongst parties to agree on the terms of such agreements. Many agreements also carry conditions, like how much time a party has to fulfil their contractual obligations. However, forming such settlement agreements in a mutual divorce definitely saves a lot of time and money as such matters are not left to the court.

The parties are themselves involved in the outcome process. It is however required by the court to pass such an agreement.

Important clauses to be Inculcated in the Agreement

Some important clauses should be mentioned in the settlement agreement so as to avoid future disputes and confusions. The same are mentioned below:

  1. General Clauses- These clauses must include the name, place of residence, occupation and other details of the parties. It can also include the details of the assets owned by the parties collectively or separately.

  2. Child Custody, visitation timings and rights clauses- The law stipulates that the welfare of a child is of utmost importance and so if there are children who are consummated outside the marriage between the parties then their maintenance and all other issues shall be fairly decided. This clause should also include the visitation rights for the parent who is staying afar from the child and how the parties shall contribute towards the expenses in taking care of the child.

  3. Splitting of Property- This clause must contain all the details of the properties that must be divided amongst the parties. It is a tricky aspect of creating the divorce settlement agreement as it can become complicated if the property is in a joint name or there is a considerable amount of debt on it.

  4. Division of assets clauses- These clauses should sort out the splitting of assets that the parting partners must have created during their matrimonial life. Such distribution of assets must be done by a mutual agreement.

  5. Division of retirement accounts- The parties must detail on all their retirement assets and a proper deliberation must take place on how such assets must be divided and who keeps how much of it.

  6. Alimony- The partner who earns has to pay the other party a set amount of money permanently which can be based on several factors like financial status, financial capacity etc.

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Pointers forNegotiating a Settlement Agreement

There are some points that must be kept in mind while you negotiate the terms and conditions to be mentioned in the Settlement Agreement.

  1. Do keep your interests in mind and keep a closer look to what expenses are essential and which ones are not.

  2. Be open to a discussion. It is easy to give into the overwhelm that takes upon you during the process but make sure to listen to the other side and deliberate in a civil fashion.

  3. When you are agreeing to full disclosure, it definitely means FULL disclosure. You should be transparent with everything and make sure you are not concealing any information consciously or subconsciously.

Even though settlement agreements in a mutual divorce is not enforceable just by itself, it can be a very exhaustive process and it is always advised to undertake all negotiations in the presence of a civil or divorce lawyer.

Why do you Need a Lawyer for a Settlement Agreement in Mutual Divorce?

The settlement agreement in mutual divorce is a very crucial document that should contain all the points of settlement on varied issues between the parties. This is done so that the divorce is enforced in a smooth manner and the parties can live their separate lives without any hindrance as long as they comply with the terms of the agreement.

It is always recommended to avail the services of a divorce lawyer as the process of creating such an agreement can be exhaustive and intricate. The agreement has to be in writing and the expertise of a lawyer can help you discuss issues on a detailed level.

Lawyers can also foretell issues that may arise in the future in certain circumstances which you might not be able to anticipate in the present. Hence, you can bring clarity on such issues and reduce it to writing. A lawyer typically has better negotiating skills than a layman so it is always better to hire a lawyer for the process of creating a settlement agreement.

On a more personal note, the entire process can test your patience and there can be an overwhelming set of emotions experienced. In such situations a third party like an experienced lawyer can help you stay focused and keep you on track.


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