In actions for divorce, Georgia courts often face requests to ratify the parties’ agreements resolving issues of property division, alimony, payment of attorneys’ fees, and even child custody and child support, and to incorporate those settlement agreements into final judgments and decrees of divorce. Not all spouses feel satisfied with the terms of their agreements though. Those with buyers’ remorse, believing they were unduly pressured to accept unfair terms, may try to contest enforcement of their settlement agreements. Can those challenges succeed? This article addresses that question.
In divorce actions, a court can exercise its discretion to refuse to approve a settlement agreement where the agreement was procured by fraud or duress.(1) A Georgia statute establishes the parameters of a “duress” defense as follows: Since the free assent of the parties is essential to a valid contract, duress, either by imprisonment, threats, or other acts, by which the free will of the party is restrained and his consent induced, renders the contract voidable at the election of the injured party. Legal imprisonment, if not used for illegal purposes, does not constitute duress.(2)
Governing authorities also recognize a form of duress known as “economic duress.” Economic duress involves the taking of undue or unjust advantage of a person’s economic necessity or distress to coerce him into making a contract.(3)
To establish a valid claim of duress, including economic duress, a party must base the claim on acts or conduct of the opposing party which are wrongful or unlawful.(4) Those requirements undoubtedly weed out much of the coercive conduct which dissatisfied spouses attempt to raise in challenging their settlement agreements. Other established limitations on economic duress claims make their successful application even more challenging. Specifically, “[o]ne may not void a contract on the grounds of duress merely because he entered into it with reluctance, the contract was very disadvantageous to him, the bargaining power of the parties was unequal, or there was some unfairness in the negotiations preceding the agreement.”(5)
Georgia law theoretically should enable a spouse to void a settlement agreement in a divorce action on grounds of duress, yet our courts in practice have proven reluctant to void contracts. Indeed, no published Georgia case has yet invalidated a divorce settlement agreement or other contract on a theory of economic distress.(6)
(1) Guthrie v. Guthrie, 277 Ga. 700, 702 f.n. 6, 594 S.E.2d 356 (2004), citing Williams v. Williams, 243 Ga. 6, 8(2), 252 S.E.2d 404 (1979). See also Culpepper v. Culpepper, 240 Ga. 600, 241 S.E.2d 825 (1978). (2) O.C.G.A. § 13-5-6. (3) Cooperative Resource Center, Inc. v. Southeast Rural Assistance Project, Inc., 256 Ga. App. 719, 720-721, 569 S.E.2d 545 (2002). (4) Rowles v. Rowles, 351 Ga.App. 246, 830 S.E.2d 589, 592(2) (2019); and Cooperative Resource, supra, 256 Ga. App. at 721. (5) Cooperative Resource, supra, 256 Ga.App. at 720-721. See also Frame v. Booth, Wade & Campbell, 238 Ga.App. 428, 430, 519 S.E.2d 237 (1999). (6) See Rowles, supra, 830 S.E.2d at 592(2).