Postnuptial agreements

Wisconsin Law Review

Volumn 2007, Issue 4, 2007, Pages 827-887

  Williams, Sean Hannon ^a  

^a HARVARD LAW SCHOOL   (United States)

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EID: 38349011313     PISSN: 0043650X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (200)

1. See, e.g., Marjorie Maguire Shultz, Contractual Ordering of Marriage: A New Model for State Policy, 70 CAL. L. REV. 204, 208 (1982) (arguing that contractual tools can help create a "new synthesis of private needs and public concerns, of freedom and structure, of flexibility and formality ... to lend dignity and legitimacy to today's diverse forms of intimate commitment").
2. UNIF. PREMARITAL AGREEMENT ACT § 3 (amended 2001), 9C U.L.A. 43 (1983). Twenty-eight states and the District of Columbia have adopted the UPAA. Dematteo v. Dematteo, 762 N.E.2d 797, 809 n.28 (Mass. 2002).
3. Allison A. Marston, Planning for Love: The Politics of Prenuptial Agreements, 49 STAN. L. REV. 887, 891 (1997) (estimating that five percent of couples enter prenuptial agreements).
4. In addition to their practical advantages, postnuptial agreements have also recently been the subject of several articles in high-profile publications. See, e.g., Susan Berfield, Does Your Marriage Need a Postnup?, BUS. WK., Apr. 16, 2007, at 80; Brooke Masters, 'Postnup' Boom as Hedge Funds Seek To Trim Exposure to Spouses, FIN. TIMES (London ed.), May 31, 2007, at 1, available at http://www.ft.com/cms/s/2ede400c-0fl4-11dc-b444-000b5dfl0621.html.
5. The only scholarship directly addressing the issue is Rebecca Glass, Comment, Trading Up: Postnuptial Agreements, Fairness, and a Principled New Suitor for California, 92 CAL. L. REV. 215, 254-56 (2004) (arguing that California's current approach to pre- and postnuptial agreements is insufficiently sensitive to fairness concerns and to the spouses' fiduciary duties to one another).
6. See infra Part II.B.
7. Compare Kathryn Abrams, Choice, Dependence, and the Reinvigoration of the Traditional Family, 73 IND. L.J. 517, 518 (1998) (arguing that contract is a pernicious tool for defining marital relations because "we should question how choice is produced within heterosexual unions, where power relationships are complicated and often unequal"), with Jeffrey Evans Stake, Paternalism in the Law of Marriage, 74 IND. L.J. 801, 814, 818 (1999) (arguing that contracts can protect women from opportunism in marriage by giving them more entitlements than the state's default marriage contract).
8. Ohio, for example, bans all postnuptial contracting. OHIO REV. CODE ANN. § 3103.06 (LexisNexis 2003) ("A husband and wife cannot, by any contract with each other, alter their legal relations, except that they may agree to an immediate separation and make provisions for the support of either of them and their children during the separation."). Other states require that the agreement meet standards of substantive fairness. See, e.g.. Bratton v. Bratton, 136 S.W.3d 595, 601 (Tenn. 2004) ("Because of the confidential relationship which exists between husband and wife, postnuptial agreements are ... subjected to close scrutiny by the courts to ensure that they are fair and equitable."); infra Part II.B., Appendix.
9. Amy L. Wax, Bargaining in the Shadow of the Market: Is There a Future for Egalitarian Marriage?, 84 VA. L. REV. 509, 649 (1998) (noting that there is a "progressive slide of women's bargaining position" during the course of a marriage); Abrams, supra note 7, at 518 (noting that a contractual regime is "likely to enforce many marital contracts that are the product of inequalities in bargaining power").
10. See, e.g., UNIF. PREMARITAL AGREEMENT ACT § 3 (amended 2001), 9C U.L.A. 43 (1983) ("The right of a child to support may not be adversely affected by a premarital agreement.").
11. For an excellent nontechnical introduction to bargaining theory, see generally Abhinay Muthoo, A Non-Technical Introduction to Bargaining Theory, 1 WORLD ECON. 145 (2000) [hereinafter Muthoo, Non-Technical Bargaining]. For a more mathematically adventurous treatment by the same author, see ABHINAY MUTHOO, BARGAINING THEORY WITH APPLICATIONS 42-55 (1999) [hereinafter MUTHOO, BARGAINING THEORY]. This Article analyzes marital bargaining using an alternatingoffers model, which is both more realistic and more useful than most models of marital bargaining. See infra Part IV.
12. See infra Part IV.
13. Wax, supra note 9, at 546-47.
14. Id. at 581-82 nn. 153-54.
15. New Jersey courts, for example, refer to these as "mid-marriage agreements]." Pacelli v. Pacelli, 725 A.2d 56, 57 (N.J. Super. Ct. App. Div. 1999). Some courts also use the term "posmup" to refer to any contracts between spouses, even those that merely make an immediate transfer of a particular asset. Dawbarn v. Dawbarn, 625 S.E.2d 186, 188 (N.C. Ct. App. 2006). To maintain consistency with the term prenuptial agreement, however, this Article uses the term postnuptial agreement to refer to only contracts that deal with the disposition of property upon divorce.
16. Bratton v. Bratton, 136 S.W.3d 595, 597 (Tern. 2004).
17. See, e.g., Nesmith v. Berger, 64 S.W.3d 110, 114 (Tex. App. 2001) (couple drafted seven versions of a prenuptial agreement, which served as grounds for drafting a postnuptial agreement); Sheshunoff v. Sheshunoff, 172 S.W.3d 686, 688 (Tex. App. 2005) (couple negotiated a thirty-seven page modification to their original prenuptial agreement).
18. See, e.g., Tibbs v. Anderson, 580 So. 2d 1337, 1338 (Ala. 1991) (postnuptial agreement provided for disposition of real estate, furniture, and paintings on the event of death); In re Estate of Barber, 440 P.2d 7, 8-9 (Ariz. 1969) (in banc) (childless couple chose to waive rights to each other's property so that each could leave their property to their respective family); In re Estate of Lewin, 595 P.2d 1055, 1057 (CoIo. Ct. App. 1979) (postnuptial agreement waived surviving spouse's elective share); In re Estate of Gab, 364 N.W.2d 924, 925 (S.D. 1985) (couple in their second marriage promised not to revoke their respective wills); Peirce v. Peirce, 994 P.2d 193, 195 (Utah 2000) (postnuptial agreement where coal-mining wife agreed to give virtually all of her income to sheep-herding husband if he left her his estate upon his death).
19. See supra note 18.
20. Katharine B. Silbaugh, Marriage Contracts and the Family Economy, 93 Nw. U. L. Rev. 65, 72 (1998).
21. Id.
22. Dawbarn v. Dawbarn, 625 S.E.2d 186, 188 (N-C. Ct. App. 2006) (husband transferred the deeds to three houses to his wife as a signal of his commitment to make the marriage work after his extramarital affair).
23. CARL E. SCHNEIDER & MARGARET F. BRINIG, AN INVITATION TO FAMILY LAW 404 (3d ed. 2006); see also BLACK'S LAW DICTIONARY 1206 (8th ed. 2004) (defining postnuptial agreement as an agreement made "at a time when separation or divorce is not imminent").
24. Courts impose very few limits on these agreements. Sally Burnett Sharp, Fairness Standards and Separation Agreements: A Word of Caution on Contractual Freedom, 132 U. PA. L. REV. 1399, 1444 (1984).
25. See, e.g., Dettloff v. Dettloff, No. 03-082567-DM, 2006 WL 3755272, at *1 (Mich. Ct. App. Dec. 21, 2006) (wife filed for divorce but then agreed to waive her claim to the family home in exchange for an attempted reconciliation); Tremont v. Tremont, 35 A.D.3d 1046, 1047 (N.Y. App. Div. 2006) (wife agreed to dismiss divorce action and cosign loan in exchange for husband's promise to sign postnuptial agreement).
26. 11 A.L.R. 283 (1921) ("A contract between husband and wife, made when the spouses are separated for legal cause, and providing for the payment of a consideration for their reunion, is, by the weight of authority, enforceable by either spouse."); 17 C.J.S. Contracts § 236 (1963); see also In re Marriage of Barnes, 755 N.E.2d 522, 525 (111. App. Ct. 2001) (noting that postnuptial agreements were generally held invalid as promoting divorce unless "the parties had already separated or were on the point of separating"); Flansburg v. Flansburg, 581 N.E.2d 430, 434 (Ind. Ct. App. 1991) (noting that most courts enforce reconciliation agreements like prenuptial agreements).
27. In re Marriage of Friedman, 122 Cal. Rptr. 2d 412, 414 (Cal. Ct. App. 2002).
28. Id. at 414-15.
29. Id. at 415, 418.
30. Pacelli v. Pacelli, 725 A.2d 56, 58, 60 (N.J. Super. Ct. App. Div. 1999).
31. Id. at 57-58.
32. Id. at 58.
33. Id. at 63.
34. Bratton v. Bratton, 136 S.W.3d 595, 598 (Tenn. 2004).
35. Id.
36. Id.
37. Id. at 601.
38. Diosdado v. Diosdado, 118 Cal. Rptr. 2d 494, 495-96 (CaI. Ct. App. 2002) (postnuptial agreement provided for $50,000 adultery penalty); Hall v. Hall, No. 2021-04-4, 2005 WL 2493382, at *4 (Va. Ct. App. Oct. 11, 2005) (postnuptial agreement provided that the wife would waive $2,500 per month alimony if the husband could prove that she committed adultery); Laudig v. Laudig, 624 A.2d 651, 652 (Pa. Super. Ct. 1993) (reconciliation agreement where wife forfeited all claims to marital property in case she was unfaithful in exchange for a small amount of cash and alimony); see also Shultz, supra note 1, at 322-23 (arguing that couples could contract for liquidated damages in the event of a breach of a marital agreement).
39. See, e.g., Diosdado, 118 Cal. Rptr. 2d at 496 (refusing to enforce prenuptial agreement providing for $50,000 adultery penalty because "this agreement attempts to penalize the party who is at fault for having breached the obligation of sexual fidelity, and whose breach provided the basis for terminating the marriage. This penalty is in direct contravention of the public policy underlying no-fault divorce").
40. See, e.g., Hall, 2005 WL 2493382, at *1-2 (holding that adultery was within the scope of allowable discovery when postnuptial agreement included a penalty clause if the husband provided a "photographic or video representation of adultery; or a finding of guilty of adultery in a court of law" to prove that his wife committed adultery again).
41. See, e.g., Tibbs v. Anderson, 580 So. 2d 1337, 1338 (Ala. 1991) (husband presented a prenuptial agreement on eve of wedding, which the wife signed two hours after the ceremony).
42. See, e.g., In re Marriage of Richardson, 606 N.E.2d 56, 57-58 (111. App. Ct. 1992) (couple entered into postnuptial agreement twenty years into their marriage and divorced four years later).
43. See, e.g., Nesmith v. Berger, 64 S.W.3d 110, 113-14 (Tex. App. 2001) (couple agreed before marriage that "they would execute a postnuptial agreement, which they did"); Bronfman v. Bronfrnan, 229 A.D.2d 314, 315 (N.Y. App. Div. 1996) (college sweethearts entered agreement after civil ceremony but before religious ceremony; In re Estate of Lewin, 595 P.2d 1055, 1056-57 (Colo. Ct. App. 1979) (elderly man consulted attorney about prenuptial agreement, and the couple signed postnuptial agreement two months after the wedding); Colvin v. Colvin, No. 13-03-00034-CV, 2006 WL 1431218, at *1 (Tex. App. May 25, 2006) (couple drafted agreement before marriage but did not finalize it until after marriage).
44. See Stackhouse v. Zaretsky, 2006 PA Super. 108, ¶ 3, 900 A.2d 383, 385 (modifying prenuptial agreement two years into marriage); Sheshunoff v. Sheshunoff, 172 S.W.3d 686, 688 (Tex. App. 2005) (couple modified prenuptial agreement nineteen years into marriage and again thirty-two years into marriage); Bradley v. Bradley, 2005 WY 107, ¶ 6, 118 P.3d 984, 988 (Wyo. 2005) (couple modified prenuptial agreement after separation but during a reconciliation).
45. Diosdado v. Diosdado, 118 Cal. Rptr. 2d 494, 494-95 (Cal. Ct. App. 2002) (couple entered postnuptial agreement following husband's infidelity to "preserve, protect and assure the longevity and integrity of" the marriage); Laudig v. Laudig, 624 A.2d 651, 652 (Pa. Super. Ct. 1993) (couple agreed to postnuptial agreement as part of reconciliation following wife's extramarital relationship).
46. Bakos v. Bakos, 950 So. 2d 1257, 1258-59 (Fla. Dist. Ct. App. 2007) (couple modified prenuptial agreement six years into marriage, after husband adopted wife's child from a previous marriage).
47. In re Marriage of Friedman, 122 Cal. Rptr. 2d 412, 414-15 (Cal. Ct. App. 2002) (couple entered postnuptial agreement to protect the wife's assets from the husband's future medical debt); Marketplace: No Pre-nup? Try a Post-nuptial (Amer. Pub. Media radio broadcast July 7, 2006), available at http:// marketplace.publicradio.org/display/web/2006/07/07/post_nuptial/ (reporting on couple who salvaged their marriage by segregating their finances in the face of the husband's excessive debt).
48. In re Matter of Estate of Gab, 364 N.W.2d 924, 925 (S.D. 1985) (couple in their second marriage promised not to revoke their respective wills one and a half years into their marriage); Button v. Button, 131 Wis. 2d 84, 88, 90, 388 N.W.2d 546, 547-48 (Wis. 1986) (couple modified prenuptial agreements with a postnuptial agreement in the fifth year of their fourteen-year marriage).
49. See, e.g., Casto v. Casto, 508 So. 2d 330, 332 (Fla. 1987) (couple signed postnuptial agreement after ten years of marriage and divorced after eleven years of marriage); Williams v. Williams, 760 So. 2d 469, 470-71 (La. Ct. App. 2000) (couple signed postnuptial agreement six months into marriage and divorced a year and a half later); In re Marriage of Nagy, No. 07-99-0303-CV, 2000 WL 562344, at *1 (Tex. App. May 9, 2000) (couple signed postnuptial agreement after four months of marriage and filed for divorce after six months of marriage).
50. Bratton v. Bratton, 136 S.W.3d 595, 597-98 (Tenn. 2004) (couple signed postnuptial agreement after one year of marriage and divorced seventeen years later). The case law only discusses postnuptial agreements that are litigated. Researching cases is unlikely, therefore, to reveal any instances where spouses entered a postnuptial agreement but never divorced.
51. Behrendsen v. Rogers, No. 27A02-0603-CV-247, 2006 WL 3525365, at *1 (Ind. Ct. App. Dec 8, 2006) (couple signed a postnuptial agreement five years into marriage and divorced three years later); Pacelli v. Pacelli, 725 A.2d 56, 57-58 (N.J. Super. Ct. App. Div. 1999) (couple signed agreement after ten years of marriage and divorced eleven years later); Stackhouse v. Zaretsky, 2006 PA Super. 108, 1 3, 900 A.2d 383, 385 (couple modified prenuptial agreement two years into marriage and divorced sixteen years later); In re Marriage of Osborne, No. 50527-1-1, 2003 WL 23020221, at *l-2 (Wash. Ct. App. Dec. 29, 2003) (couple signed postnuptial agreements three and five years into marriage and separated nine years after the last agreement).
52. Marketplace: No Pre-nup? Try a Post-nuptial, supra note 47.
53. Bratton, 136 S.W.3d at 598; In re Marriage of Friedman, 122 Cal. Rptr. 2d 412, 414-15 (Cal. Ct. App. 2002).
54. See infra Appendix.
55. See infra Appendix.
56. Stoner v. Stoner, 819 A.2d 529, 533 n.5 (Pa. 2003) (discussing Simeone v. Simeone, 581 A.2d 162, 166 (Pa. 1990) (rejecting special rules and applying traditional contract law principles to prenuptial agreements)).
57. See infra Appendix.
58. OHIO REV. CODE ANN. § 3103.06 (LexisNexis 2003) ("A husband and wife cannot, by any contract with each other, alter their legal relations, except that they may agree to an immediate separation and make provisions for the support of either of them and their children during the separation.").
59. See, e.g., Brewsaugh v. Brewsaugh, 491 N.E.2d 748, 751 (Ohio Com. Pl. 1985).
60. MINN. STAT. ANN. § 519.11 (West 2006).
61. Id.; Bratton v. Bratton, 136 S.W.3d 595, 601 (Tenn. 2004) ("Because of the confidential relationship which exists between husband and wife, postnuptial agreements are ... subjected to close scrutiny by the courts to ensure that they are fair and equitable."); Pacelli v. Pacelli, 725 A.2d 56, 58, 60 (N.J. Super. Ct. App. Div. 1999) (holding that a postnuptial agreement must be "fair and equitable when made and when it is sought to be enforced").
62. See MINN. STAT. ANN. § 519.11 (West 2006); In re Marriage of Friedman, 122 CaI. Rptr. 2d 412, 418 (Cal. Ct. App. 2002); Bratton, 136 S.W.3d at 603 (implying that any threat of divorce to a spouse invalidates a postnuptial agreement because of "the taint of coercion and duress").
63. Friedman, 122 Cal. Rptr. 2d at 417-18 (rejecting analogy to premarital agreements and analyzing postnuptial agreement under California's rules governing property transfers between spouses, which impose a rebuttable presumption of coercion) (citing CAL. FAM. CODE § 721(b) (West 2004) and In re Marriage of Haines, 39 Cal. Rptr. 2d 673, 683 (Cal. Ct. App. 1995)). California is unique in that it imposes different burdens on pre- and postnuptial agreements, yet it is not perfectly clear which is more difficult to enforce.
64. MINN. STAT. ANN. § 519.11(1a)(d).
65. Compare Zagari v. Zagari, 746 N.Y.S.2d 235, 238 (N.Y. Sup. Ct. 2002), with Whitmore v. Whitmore, 778 N.Y.S.2d 73, 75 (N.Y. App. Div. 2004).
66. See Simmons v. Simmons, No. CA 06-303, 2007 WL 465889, at *2 (Ark. Ct. App. Feb. 14, 2007); Bratton, 136 S.W.3d at 603 (holding that wife's promise to forgo a career in dentistry was "vague and illusory" because her plans to become a dentist were too preliminary).
67. TEX. FAM. CODE ANN. §§ 4.001-.010 (Vernon 2006).
68. Id. § 4.105(b).
69. Bratton, 136 S.W.Sd at 601 ("Having established what is necessary for there to be a valid and enforceable postnuptial agreement, we must determine whether the agreement entered into by the parties in this case meets those requirements. We hold that it does not because it was not supported by adequate consideration."). 70. Id. at 602.
70. Although spouses cannot promise never to file for divorce, they can promise to work on the marriage in good faith and refrain from pursuing their legal right to divorce for a reasonable time.
71. Bratton, 136 S.W.3d at 602.
72. Id. at 603.
73. Id. at 603-04.
74. Id. at 603.
75. If a litigant's claim is valid, courts will not inquire into whether he or she intended to pursue his or her right. RESTATEMENT (SECOND) OF CONTRACTS § 74 (1981).
76. Bratton, 136 S.W.3d at 604 n.2.
77. See, e.g., Pacelli v. Pacelli, 725 A.2d 56, 58, 60 (N.J. Super. Ct. App. Div. 1999) (holding that a postnuptial agreement must be "fair and equitable when made and when it is sought to be enforced").
78. Id.
79. See, e.g., In re Marriage of Richardson, 606 N.E.2d 56, 65 (111. App. Ct. 1992) ("The determination of unconscionability focuses on the parties' relative economic positions ...."); Pacelli v. Pacelli, 725 A.2d 56, 63 (N.J. Super. Ct. App. Div. 1999) (invalidating agreement after concluding that it gave only fifteen percent of marital estate to the wife).
80. AM. LAW INST., PRINCIPLES OF THE LAW OF FAMILY DISSOLUTION: ANALYSIS AND RECOMMENDATIONS § 5.06 (2000).
81. Elizabeth S. Scott, Rehabilitating Liberalism in Modern Divorce Law, 1994 UTAH L. REV. 687, 704.
82. UNIF. PREMARITAL AGREEMENT ACT § 6(a) (amended 2001), 9C U.L.A. 48-49 (1983). Twenty-eight states and the District of Columbia have adopted the UPAA. Dematteo v. Dematteo, 762 N.E.2d 797, 809 n.28 (Mass. 2002). They are Arizona, Arkansas, California, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, South Dakota, Texas, Utah, Virginia, West Virginia, and Wisconsin. Id.
83. See Pacelli, 725 A.2d at 60.
84. STANLEY MORGANSTERN & BEATRICE SOWALD, BALDWIN'S OHIO PRACTICE: DOMESTIC RELATIONS LAW § 12:17 (2003 & Supp. 2007).
85. Pacelli, 725 A.2d at 59.
86. Id. at 61-62 (internal quotations omitted) (quoting Mathie v. Mathie, 363 P.2d 779, 783 (Utah 1961)).
87. In re Marriage of Haines, 39 Cal. Rptr. 2d 673, 683 (Cal. Ct. App. 1995) ("When an interspousal transaction advantages one spouse, the law, from considerations of public policy, presumes such transactions to have been induced by undue influence. Courts of equity . . . view gifts and contracts which are made or take place between parties occupying confidential relations with a jealous eye." (internal quotation and citations omitted)), cited in In re Marriage of Friedman, 122 Cal. Rptr. 2d 412, 418 (Cal. Ct. App. 2002).
88. Wax, supra note 9, at 513.
89. Abrams, supra note 7, at 518.
90. Id.
91. Pacelli, 725 A.2d at 56.
92. Id. at 57.
93. Id. at 58, 60.
94. Id. at 62 (calculating that husband offered wife eighteen percent of the marital estate).
95. Id. at 58.
96. Id. This may have been influenced by her religion. Although the court does not mention this, she may have been Catholic and believed that divorce was a sin. See BUREAU OF DEMOCRACY, HUMAN RIGHTS, & LABOR, U.S. DEP'T. OF STATE, INTERNATIONAL RELIGIOUS FREEDOM REPORT 2006, available at http://www.state.gov/g/drl/rls/irf/ 2006/71387.htm (noting that eighty-seven percent of native-born Italians are "nominally Catholic").
97. Pacelli, 725 A.2d at 58.
98. Id. at 62.
99. Abrams, supra note 7, at 520-22.
100. Id (citing these factors as important determinants of bargaining power in heterosexual relationships).
101. Ira Mark Ellman & Sharon Lohr, Marriage as Contract, Opportunistic Violence, and Other Bad Arguments for Fault Divorce, 1997 U. ILL. L. REV. 719, 722-23.
102. Scott, supra note 82, at 704.
103. Kathrine C. Daniels et al., Alternate Formulas for Distributing Parental Incomes at Divorce, 27 J. FAM. & ECON. ISSUES 4, 19-20 (2006) (finding that under both real and proposed alimony regimes, ex-wives have a much lower income-to-needs ratio than ex-husbands).
104. Ira Mark Ellman, The Theory of Alimony, 77 CAL. L. REV. 1, 47 (1989).
105. See Silbaugh, supra note 20, at 71.
106. Shultz, supra note 1, at 248.
107. See supra note 38.
108. See Diosdado v. Diosdado, 118 Cal. Rptr. 2d 494, 495-97 (Cal. Ct. App. 2002) (refusing to enforce prenuptial agreement providing for $50,000 adultery penalty because "the agreement attempts to impose a penalty on one of the parties as a result of that party's 'fault' during the marriage, it is contrary to the public policy underlying the no-fault provisions for dissolution of marriage").
109. See infra Part III. A.2.
110. See Robert Kirkman Collins, The Theory of Marital Residuals: Applying an Income Adjustment Calculus to the Enigma of Alimony, 24 HARV. WOMEN'S L.J. 23, 28, 32 (2001).
111. See COLIN F. CAMBRER, BEHAVIORAL GAME THEORY: EXPERIMENTS IN STRATEGIC INTERACTION 159 (2003) (collecting and discussing experiments on optimism and the self-serving bias which suggest that parties to a legal case will interpret ambiguity in their favor, thereby decreasing the likelihood of settlement).
112. Fetter Lundborg et. al., Getting Ready for the Marriage Market? The Association Between Divorce Risks and Investments in Attractive Body Mass Among Married Europeans, 39 J. BIOSOC. SCI. 531, 540 (2007) (finding that when divorce rates are high, spouses stay more fit and attractive); Stake, supra note 7, at 802 (noting that spouses will take "costly (and often needless) steps to protect themselves" from a negative postdivorce lifestyle).
113. DANIEL GILBERT, STUMBLING ON HAPPINESS 21 (2006) (collecting studies of mortality, anxiety, and optimism).
114. Lynn A. Baker & Robert E. Emery, When Every Relationship is Above Average: Perceptions and Expectations of Divorce at the Time of Marriage, 17 LAW & HUM. BEHAV. 439, 448 (1993).
115. Lis Wiehl, 'Til Prenup Do We Part, FOX NEWS, Feb. 19, 2007, available at http://www.foxnews.com/story/0,2933,252778, 00.html (noting "that 80 percent of matrimonial lawyers reported an increase of prenuptial agreements in the past five years").
116. Marston, supra note 3, at 891 (estimating that five percent of couples sign prenuptial agreements); ARLENE G. DUBIN, PRENUPS FOR LOVERS: A ROMANTIC GUIDE TO PRENUPTIAL AGREEMENTS 15 (2001).
117. See Heather Mahar, Why are there so Few Prenuptial Agreements? 15 (John M. Olin Center for L., Econ., & Bus., Harvard Law Sen., Discussion Paper No. 436, Sept. 2003), available at http://www.law.harvard.edu/programs/olin_center/papers/pdf/436.pdf (reporting that about sixty percent of survey respondents would conclude that there was a greater possibility of divorce if their partner presented them with a prenuptial agreement).
118. Baker & Emery, supra note 115, at 443 (surveying couples applying for marriage licenses and finding that they accurately predicted the average divorce rate, but that the median couple also predicted that they would never divorce); Mahar, supra note 118, at 2 (finding that approximately twelve percent of respondents felt that they might divorce someday); Scott, supra note 82, at 700 n.48 (finding that less than twelve percent of college men and six percent of college women thought that they would ever get a divorce).
119. Jody VanLaningham et al., Marital Happiness, Marital Duration, and the U-Shaped Curve: Evidence from a Five-Wave Panel Study, 79 SOC. FORCES 1313, 1329-31 (2001) (reporting that marital happiness declines significantly in the early years of marriage and then levels off until late in the marriage, when it declines again).
120. See Baker & Emery, supra note 115, at 443.
121. GILBERT, supra note 114, at 175-80 (noting that people often mispredict their reactions to future events because they underestimate the degree to which they will adjust to both positive and negative events).
122. Christine Jolis, Contracts as Bilateral Commitments: A New Perspective on Contract Modification, 26 J. LEGAL STUD. 203, 207 (1997).
123. Ian Smith, The Law and Economics of Marriage Contracts, 17 J. ECON. SURV. 201, 218 (2003).
124. See Eric Rasmusen & Jeffrey Evans Stake, Lifting the Veil of Ignorance: Personalizing the Marriage Contract, 73 IND. L.J. 453, 475-81 (1998) for an interesting debate on the merits of renegotiation occurring between the two coauthors.
125. UNIF. PREMARITAL AGREEMENT ACT § 5 (amended 2001), 9C U.L.A. 47 (1983).
126. See RESTATEMENT (SECOND) OF CONTRACTS § 89 (1981) (discussing modification).
127. Martin Zelder, For Better or for Worse? Is Bargaining in Marriage and Divorce Efficient?, in THE LAW AND ECONOMICS OF MARRIAGE AND DIVORCE 157, 161 (Antony W. Dnes & Robert Rowthorn eds., 2002).
128. Id.
129. Id. at 162; Wax, supra note 9, at 528-29 n.36 (collecting and discussing criticisms).
130. See, e.g., GARY S. BECKER, A TREATISEON THE FAMILY 112 (1991).
131. Robert A. Pollak, Interdependent Preferences, 66 AM. ECON. REV. 309, 310-15 (1976) (describing several notions of interdependent utility). For a criticism of interdependent utilities and the discussion of an alternate framework for understanding altruism, see MILTON C. REGAN, JR., ALONE TOGETHER: LAW AND THE MEANINGS OF MARRIAGE 65-66, 74-75 (1999).
132. Wax, supra note 9, at 576.
133. See Theodore C. Bergstrom, Economics in a Family Way, 34 J. ECON. LITERATURE 1903, 1929 (1996) (analyzing marital bargaining under this model and noting that its assumptions "can be much relaxed in the direction of realism without altering the main results"); CAMERER, supra note 112, at 161. This model was first developed by Ariel Rubinstein and later modified by Ken Binmore. See Ken Binmore, Ariel Rubinstein & Asher Wolinsky, The Nash Bargaining Solution in Economic Modeling, 17 RAND J. ECON. 176, 176-79 (1986).
134. MUTHOO, BARGAINING THEORY, supranote 11, at 42-43.
135. Id ; Wax, supra note 9, at 541.
136. Ken Binmore, Avner Shaked & John Sutton, An Outside Option Experiment, 104 QUARTERLY J. ECON., 753, 757 (1989).
137. Id.
138. Bargaining in general is often influenced by precommitment strategies. Muthoo, Non-Technical Bargaining, supra note 11, at 160-62. They are, however, unlikely to be important in the context of marital contracting. In general, precommitment tactics can effectively change a party's reservation price and can therefore alter the range of mutually beneficial bargains and the terms of the ultimate bargain. In other contexts, one party to a negotiation may be able to precommit to accepting only a narrow range of offers. For example, a national government may make public promises to its citizens that it will not accept any trade agreements that are not extremely favorable to that nation. Because this government can credibly claim that it cannot go back on its word, or at least that going back on its word would be costly, it can credibly demand that, if any agreement can be reached, it must be one that provides the government with more than fifty percent of the surplus. Precommitment devices are unlikely to have a large effect on marital bargaining. Spouses are likely to have few opportunities to make precommitments. Spouses keep many financial matters private. A postnuptial agreement is likely to be similar. A spouse who hides the fact that he or she is considering a postnuptial agreement or hides the terms of that agreement cannot precommit. To the extent that precommitment is possible, it is likely to favor the spouse whose position more-closely reflects prevailing moral opinion. In order to precommit, spouses must be able to inform other people of their commitment, and these other people must be able to punish them for breaching their commitment. Either spouse could inform others of his or her thoughts on a postnuptial agreement. A husband might inform his family and friends that he will not settle for anything less than protecting a certain subset of his assets. A wife may similarly tell family and friends that she cannot be in a marriage where sharing is not the guiding principle. To the extent that the wife's claim might have more moral purchase, she will find more people to support her position and more of them will support it vigorously.
139. Wax, supra note 9, at 543 & n.75.
140. Muthoo, Non-Technical Bargaining, supra note 11, at 162.
141. Id. at 163 (using a similar example).
142. B. Pawlowski & R. I. M. Dunbar, Impact of Market Value on Human Mate Choice Decisions, 266 PROC. ROYAL SOC'Y BIOLOGICAL SCI. 281, 283 (1999) (examining supply and demand in dating by looking at newspaper personal ads and concluding that both men and women are "well attuned to their market value," except for 45-49 year olds of both sexes, who, for unknown reason, tend to overestimate their market value).
143. CAMERER, supra note 112, at 175.
144. Amnon Rapoport et. al., Effects of Fixed Costs in Two-Person Sequential Bargaining, 28 THEORY & DECISION 47, 52-53 (1990), cited in CAMERER, supra note 112, at 175. Regarding the exchange rate, one U.S. dollar is worth 4.0650 Israeli shekels (as of Sept. 19, 2007). Corporatelnformation.com, Exchange Rate of Israeli Shekel vs. All Currencies, http://corporateinformation.com/Site/BCTabs/Currency- Exchange-Rates.aspx?c=376_(last visited Sept. 21, 2007). Accordingly, thirty shekels is $7.38 (30 shekels * 4.0650 = $7.38).
145. Rapoport et al., supra note 145, at 53.
146. See CAMERER, supra note 112, at 176 (noting that "[t]he horrible truth sinks in quickly" for those with high costs of delay).
147. Id. at 469.
148. MUTHOO, BARGAINING THEORY, supra note 11, at 73.
149. See id.; CAMERER, supra note 112, at 162.
150. For an overview and meta-analysis of 150 studies, see James P. Byrnes, David C. Miller & William D. Schafer, Gender Differences in Risk Taking: A Meta-Analysis, 125 PSYCHOL. BULL. 367, 377-78 (1999) (finding that women were more risk averse than men across a number of tasks).
151. See infra notes 158-62 and accompanying text.
152. Catherine C. Eckel & Philip J. Grossman, Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk, 23 EVOLUTION & HUM. BEHAV. 281, 290 (2002) (asserting that their experimental "results indicated that women were, on average, more risk averse than men in gamble choices.").
153. Annika E. Sundén & Brian J. Surette, Gender Differences in the Allocation of Assets in Retirement Savings Plans, 88 AM. ECON. REV. 207, 209 (1998); see also Nancy Ammon Jianakoplos & Alexandra Bernasek, Are Women More Risk Averse?, 36 ECON. INQUIRY 620, 627 (1998) (although not statistically significant, the study found that single women held fewer risky assets than single men.)
154. Jianakoplos & Bernasek, supra note 154, at 627.
155. See Alexandra Bernasek & Stephanie Shwiff, Gender, Risk, and Retirement, 35 J. ECON. ISSUES 345, 354 (2001) (analyzing pension investment choices of university faculty and their spouses); Richard P. Hinz et al., Are Women Conservative Investors? Gender Differences in Participant-Directed Pension Investments, in POSITIONING PENSIONS FOR THE TWENTY-FIRST CENTURY 91, 96 (Michael S. Gordon et al. eds., 1997) (finding that married women as a group invest their pensions more conservatively than married men).
156. See, e.g., Daniel Kahneman et al., The Endowment Effect, Loss Aversion, and Status Quo Bias, in CHOICES, VALUES, AND FRAMES 159, 167 (Daniel Kahneman & Amos Tversky eds., 2000); Peter J. van Koppen, Risk Taking in Civil Law Negotiations, 14 LAW & HUM. BEHAV. 151, 160 (1990); Nathalie Etchart-Vincent, Is Probability Weighting Sensitive to the Magnitude of Consequences? An Experimental Investigation on Losses, 28 J. RISK & UNCERTAINTY 217, 223-24 (2004).
157. Amos Tversky & Daniel Kahneman, Advances in Prospect Theory: Cumulative Representation of Uncertainty, 5 J. RISK & UNCERTAINTY 297, 306 (1992); see also Kahneman et al., supra note 157, at 166-67.
158. van Koppen, supranote 157, at 163.
159. Id.
160. Etchart-Vincent, supra note 157, at 222, 224 ("Behavior towards risk thus appears not to be sensitive to the magnitude of negative payoffs."). There is, however, some evidence suggesting that people will be
161. See infra notes 166-68 and accompanying text.
162. See infra notes 166-68 and accompanying text.
163. Colin F. Camerer, Progress in Behavioral Game Theory, J. ECON. PERSP., Fall 1997, at 167, 172.
164. Cass R. Sunstein, Behavioral Analysis of the Law, 64 U. CHI. L. REV. 1175, 1179-81 (1997) (noting that people's displeasure from a loss is greater than their pleasure from an equivalent gain).
165. See Renate Schubert et al., Gender Specific Attitudes Towards Risk and Ambiguity: An Experimental Investigation 5-6 (Ctr. for Econ. Res., Swiss Fed. Inst. of Tech., Working Paper No. 17, 2000), available at http://www.cer.ethz.ch/research/workingpapers (finding that men are more risk averse than women in the face of losses that could produce a large range of final payoffs).
166. See, e.g., Melanie Powell & David Ansie, Gender Differences in Risk Behaviour in Financial Decision-Making: An Experimental Analysis, 18 J. ECON. PSYCHOL. 605, 622-27 (1997); Eckel & Grossman, supra note 153, at 290.
167. Jarnie Brown Kruse & Mark A. Thompson, Valuing Low Probability Risk: Survey and Experimental Evidence, 50 J. ECON. BEHAV. & ORG. 495, 500-02 (2003); Renate Schubert et al., Financial Decision-Making: Are Women Really More Risk Averse?, 89 AM. ECON. REV. 381, 381-83 (1999) (finding no difference between men and women when subjects were faced with a positive probability of suffering a loss and had to decide how much insurance to purchase). Professor Margaret Brinig has conducted a number of unpublished studies of the difference between women's and men's levels of risk aversion. She found that women and men exhibited similar risk aversion in a number of different contexts, such as life-insurance purchases, propensity to speed, purchases of lottery tickets, and the number of questions left blank on the SAT. Margaret F. Brinig, Comment on Jana Singer's Alimony and Efficiency, 82 GEO. L.J. 2461, 2475-76 (1994).
168. MUTHOO, BARGAINING THEORY, supra note 11, at 137.
169. Id.
170. Bergstrom, supra note 134, at 1926.
171. Id.
172. Shelley Lundberg & Robert A. Pollak, Separate Spheres Bargaining and the Marriage Market, 101 J. POL. ECON. 988, 993 (1993).
173. 725 A.2d 56, 58 (N.J. Super. Ct. App. Div. 1999).
174. 136 S.W.3d 595, 598 (Tenn. 2004).
175. For a comprehensive discussion of these trends, see Wax, supra note 9, at 544-55.
176. Scott, supra note 82, at 704-05 n.64.
177. Men's wages are, on average, higher than those of women. LESLIE JOAN HARRIS ET AL., FAMILY LAW 500 (3d ed. 2005) (citing U.S. Census Bureau, Population of the United States, 2000). The disparity in income between new husbands and new wives is likely to be greater than the disparity in income between men and women in general because men tend to marry younger women and wages increase with age. Wax, supra note 9, at 548. These initial differences are likely to be magnified over time. Ellman, supra note 105, at 46 ("Whenever spouses have different earning capacities and want to plan rationally as a single economic unit, they will conclude that, where possible, they should shift economic sacrifices from the higher earning spouse to the lower earning spouse, because that shift will increase the income of the marital unit as a whole.").
178. See Wax, supra note 9, at 546-47 n.88.
179. Id.
180. Id. at 547-49; Bergstrom, supra note 134, at 1929 ("A satisfactory theory of bargaining between spouses should be embedded in a theory of marriage markets. ").
181. For further empirical support, see Daniels et al., supra note 104, at 6 (collecting studies and noting that ex-wives suffer a larger financial loss at divorce, while ex-husbands realize a gain in their standard of living).
182. Ellman, supra note 105, at 43.
183. Id.
184. Wax, supra note 9, at 548.
185. Id.
186. Id. at 548-49.
187. CAMERER, supra note 112, at 175-76.
188. This example is adapted from Muthoo, Non-Technical Bargaining, supra note 11, at 155-56.
189. Under current law and settlement practices, her outside option is indeed worth very little. At most, thirty percent of wives receive alimony and almost no divorce settlements that occur without an attorney include alimony. SCHNEIDER & BRINIG, supra note 23, at 329; Daniels et al., supra note 104, at 6 (collecting studies and noting that spousal support is only awarded in ten to fifteen percent of cases). In total, women tend to be much poorer after divorce than before. Id. (collecting studies and noting that ex-wives suffer a larger financial loss at divorce while ex-husbands realize a gain in their standard of living).
190. Wax, supra note 9, at 581.
191. Id.
192. Id.
193. Id. at 581 n. 153.
194. See supra Part IV.C.
195. Camerer, supranote 164, at 172.
196. See supra Part IV.C.
197. K. Binmore et al., Testing Noacooperative Bargaining Theory: A Preliminary Study, 75 AM. ECON. REV. 1178, 1178-80 (1985), cited in CAMERER, supra note 112, at 175.
198. Id at 1178-79; CAMERER, supra note 112, at 469 (discussing structured and unstructured bargaining experiments).
199. Binmore et al., supra note 198, at 1179-80.
200. Id.