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Divorce agreement is regarded as a very important legal document in the divorce case, which is not only the required material in the procedures of divorce by agreement, but also the legal ground regarding issues of child custody and property division. In case any disputes occur, it can also be the legal ground for the court’s judgment concerning property division and child custody after divorce.
However, in practice, we find some divorcers often disregard the importance of divorce agreement, as they think everything is just fine as long as the divorce procedures can be approved quickly. In the meanwhile, some divorce registries may not attach importance to the contents of divorce agreement but go through formalism as well, on condition that there are expressions such as “both parties get divorced by mutual consent”, “barren marriage”, “no disagreements on property divisions” in the divorce agreement, and then divorce registration is concluded. Moreover, some matrimonial registries even provide simple formats of divorce agreement for duplicate. However, though it seems to take a little time and energy in the process, once any disputes occur after divorce, it is hard to judge right and wrong of both parties on the basis of the simple divorce agreement.
The following is quite popular formats of divorce agreement in relevant books and on the Internet at present:
Divorce Agreement
Party A: Mr. Zhang, Male, born on dd/mm/yy, the Han nationality, Add: 1-XYZ, 1-XYZ Rd.
Party B: Mrs. Wang, Female, born on dd/mm/yy, the Han nationality, Add: 1-XYZ, 1-XYZ Rd.
Both parties went through procedures for marriage registration on dd/mm/yy at the People’s Government of XYZ District. Because of emotional disharmony, both parties’ marriage has been completely broken down. So, both parties come to the following divorce agreement by mutual consent.
1.Mr. Zhang and Mrs. Wang get divorced by mutual consent.
2.Mrs. Wang takes the responsibility of bringing up their son while Mr. Zhang has to pay 500 Yuan for the cost of aliment before the 10th day per month until the son comes of age at 18 full years of life. After their son comes of 18 ages, the cost of aliment can be renegotiated by both parties.
3.Both parties own a flat located at 1-XYZ, 1-XYZ Rd., worth of 60,000 Yuan. Under the negotiation, Mrs. Wang possesses the property right of flat by making a lump-sum payment of 30,000 Yuan in terms of cash to Mr. Zhang. As for domestic electrical appliances and furniture inside the house (Please refer to the detailed list.), both parties agree to assess such property at 20,000 Yuan and Mrs. Wang should pay 10,000 Yuan to Mr. Zhang for the possession of them.
4.Both parties have no jointly creditor’s rights and liabilities.
5.Mr. Zhang has the right to pick up his son to his place at 8 o’clock on the first Saturday per month but to send him back before 9 o’clock tomorrow morning to Mrs. Wang’s place. In case temporary visits or during the Spring Festival, Ms. Zhang should discuss with Mrs. Wang one day in advance and exercise his visitation right in line with the result of discussion.
This agreement shall be executed in three counterparts. Party A and B shall each hold one copy and the third copy shall be placed in the matrimonial registry on file. The agreement shall take effect when it has been signed by both parties and gone through due procedures for divorce registration.
Party A: Party B:
dd / mm / yy . dd / mm / yy
The above-mentioned divorce agreement is very simple, which is only suitable to those couples in possession of clear and definite common property. However, for modern family property, this divorce agreement is nowhere near to satisfy requirements or to guard against any divorce risks. The divorce agreement should focus on division of common property, which resembles the patterns of contract. Hence, it is especially important to work out detailed and complete articles in the divorce agreement to safeguard respective rights and interests of both parties. Please try to compare the divorce agreement with the following one.
Divorce Agreement
Party A: Mr. Zhang, Male, born on dd/mm/yy, the Han nationality, Add: 1-XYZ, 1-XYZ Rd.
Party B: Mrs. Wang, Female, born on dd/mm/yy, the Han nationality, Add: 1-XYZ, 1-XYZ Rd.
Both parties went through procedures for marriage registration on dd/mm/yy at the People’s Government of XYZ District. Because of emotional disharmony, both parties’ marriage has been completely broken down. So, both parties come to the following divorce agreement by mutual consent.
1. Mr. Zhang and Mrs. Wang get divorced by mutual consent.
2. The couple possesses a flat located at1-XYZ, 1-XYZ Rd.; the contract price is 600,000 Yuan, while the current price of the flat is 1,000,000 Yuan (Interior decorations and facilities included). The flat was granted a loan under the name of theParty A of 420,000 Yuan with the down payment of 180,000 Yuan which was paid through both parties’ bank deposits after marriage. Under the negotiation, the ownership of the flat is possessed by Party B and Party B shall make compensation for the housing of 350,000 Yuan to Party A. The formula of the compensation is: [the current price (1,000,000 Yuan) - the outstanding loan (300,000 Yuan)]/2. Party B shall pay off 350,000 Yuan to Party A for three times within two years.
First: On the same day after completing divorce procedures, Party B should pay 100,000 Yuan to the male party.
Second: Before December. 31 of the year after completing divorce procedures, Party B should pay another 100,000 Yuan to Party A.
Third: Before December. 31 of the next year after completing divorce procedures, Party B should pay off the rest 150,000 Yuan to Party A.
In case Party B doesn’t pay off on schedule, the overdue payment should be charged with a fine amounting to 0.05% per day from the first day of such breach.
In addition, Party A has the obligation to cooperate with Party B in the transfer of the core creditor and the property right. The relevant procedures concerning transfer shall be conducted soon after completing divorce procedures. In case Party A doesn’t offer convenience in the transfer of the property right or unnecessary damages are caused, Party A should compensate doubly for Party B.
As for domestic electric appliances and so on in the flat (Please refer to the detailed list.), both parties agree to evaluate them for a total of 20,000 Yuan. The female party has the procession of all the domestic electric appliances by paying 10,000 Yuan to the male party.
3.Both parties have no jointly creditor’s rights and liabilities.
4.Party B should take the responsibility of bringing up their son and Party A should pay the cost of aliments of 500 Yuan (living expenses, educational tuitions, medical fees included) before the 10th day per month until Zhangliang graduates from senior high school. Both parties can renegotiate due expenses after Zhangliang finishes senior high school
5.Party A has the right to pick up his son to his place at 8 o’clock the first Saturday per month and send him back at 9 o’clock the Sunday morning to Party B’s place. In case temporary visits or during the Spring Festival, Party A should discuss with Party B one day in advance and exercise his visitation right in line with result of discussion..
This agreement shall be executed in three counterparts. Party A and B shall each hold one copy and the third copy shall be placed in the matrimonial registry on file. The agreement shall take effect when it has been signed by both parties and gone through due procedures for divorce registration.
Party A: Party B:
dd / mm / yy dd / mm / yy
Compared with the first divorce agreement, this agreement is more detailed concerning the property division, especially in the division of house property. With housing prices rising so rapidly, more and more families start to purchase new houses through housing mortgage, thus, property division relates to repayment of bank loans and the transfer of property right.
In addition, when drawing a mature divorce agreement, the following aspects should be paid attention to.
1.Agreements and solutions to house mortgage.
Generally speaking, provided that both parties have agreed on the division of house property, the bank shall consent to the transfer of core creditor and cooperate with the transfer procedures of mortgage contract. However, some creditors’ mortgage term is as long as 30 years, or they have to repay more than 4000 Yuan per month and the transferred core creditor’s monthly income is insufficient, not as much as twice of the mortgage, the bank shall not consent to the transfer of core creditor or the decrease of the joint mortgager, unless the other party provides another guarantor or takes out other insurances. Hence, whether the bank shall consent to the transfer or decrease of mortgager should be carefully taken into account by both parties before the division concerning house property.
Furthermore, in the transfer procedures, usually the bank shall require both parties to appear on the spot. In case one party is absent, the bank has the right to refuse the transfer request. But the parties involved can commission the agent (the lawyer included) to conduct the transfer procedures. All the relevant letters of authorization must be notarized.
While in case no bank loan involved, the parties can deal with the transfer of property right at the real estate trading center. Also, both parties are required to present themselves at the center in most occasions. Moreover, the divorce agreement is important, while the execution of the agreement is more important. After divorce, both parties shall cooperate with each other on the basis of honesty and trust in executing corresponding rights or obligations. However, as most people are still mired in a grudge against divorce, the situations that one party doesn’t fulfill his or her obligations aren’t rare at all and sometimes the character “honesty” just counts for nothing. Hence, in the divorce agreement, punishment regarding refusal to perform shall be clearly illustrated. For instance, penalties of not paying off housing depreciation payment on schedule, or not cooperating with the transfer procedures concerning the property right and the like should be involved.
Last but not the least, pursuant to State Administration of Taxation’s Reviews concerning the issue whether the transfer of property right after divorce shall be taxed (Letter of State Taxation (1999) No.391 June. 3 1999), the couple’s house property is included in couple’s common property. As the transfer of ownership of house property to the other party based on the divorce agreement, it is tax-exempt in accordance with the current taxation regulations. In other words, the transfer of ownership of house property after divorce shall not be taxed. In this way, the contract taxes by 1.5% to 3% of the housing price can be avoided.
2.Agreements and solutions to bank deposits.
Usually, the bank deposits are saved under the name of one party; especially when the male party is fully occupied in his business and have no ideal about the amount and the saving accounts. In order to make division of common property transparent and prevent any unreported or hidden property, the amount of bank deposits, the saving accounts and the banks are necessary to be explicated in the divorce agreement. In case the party doesn’t perform his or her duties for settlement, the other party may take a legal action. On the basis of information on bank deposits in the divorce agreement, any saving and withdrawal can be investigated in time.
In most divorce agreements, both parties usually stipulate regarding bank deposits as follows: i.e.: Deposits in his or her own saving accounts are possessed by himself or herself. We think this kind of stipulation is double-edged sword: the advantage is that it really saves time and energy in drawing, while the disadvantage is that, in case there are unreported deposits, even if the other party learns about this after divorce, it is quite hard to request re-division. In conclusion, this kind of stipulation is more favorable to the rich party who may have unreported property, causing unfair division of common property. Therefore, to be just and fair, we suggest that both parties should list the detailed information on bank deposits under both parties’ names, including bank names, saving accounts, deposit balances, kinds of currencies and the like in the divorce agreement, thus in case one party is identified for hiding common property, the other party has the right to go to litigations, asking for re-division and due penalties for his or her behaviors on purpose.
3.Agreements and solutions to securities.
In the divorce agreement, the party involved may only evaluate the overall stocks under the name of one party at large; thus, in case one party doesn’t perform the obligations and the other party wants to take a legal action, it is quite hard to investigate for the lack of the specific securities information. Therefore, it may save a lot of troubles of both parties by clearly drawing the codes of the shareholder, stock accounts, and the stock exchanges where the account was opened.
In addition, actually, it is quite common that an agent may be commissioned to speculate in stocks with the common property of both parties, that means the stock account is not opened under the name of either party but a third person. Many divorcers have taken notice of this and agree on that the stock capitals belong to common property. However, this kind of agreement cannot be directly adopted by the court, as in case the agent doesn’t admit the commission or the borrowing stock account nor admit the capital and types of stocks, it is hard for the court to support the party’s requests. In conclusion, it is absolutely essential to work out relevant items in divorce agreement and ask the agent to sign or to make a contract regarding stocks signed by all three parties.
4. Agreements and solutions to company or enterprise equity.
More and more divorce disputes are concerned with the division of company or enterprise equity. In case one party or both parties possess company or enterprise equity, the general solution is that both parties make an agreement stating that one party holds equity by paying the other party at the half price of the total equity. In this way, it is required that both parties work out the equity values and methods of payment clearly in the agreement. Besides, in case under negotiation, both parties decide to transfer part or the entire company or enterprise equity owned by one party to the other party, it must accord with the relevant regulations of Company Law of P.R.C
In accordance with the judicial interpretation of China Supreme Court concerning Marriage Law of the People's Republic of China (implemented on Dec 25th 2003), in the case of one party establishing the limited company in his or her own name, while the other party is not a shareholder of the company, such division concerning capitals and equity should be respectively dealt with according to situations.
1) Both parties agree to transfer part or entire company or enterprise equity to the spouse of the shareholder. The spouse of the shareholder can become the shareholder of the company on the condition that over half of the other shareholders support and the rest of them make clear that they give up the right of preemption.
2) Although both parties have come to agreements on shares transfer concerning the capitals one party put up for establishing the limited company and the transfer price, over half of the other shareholders don’t support the transfer and express their wills of purchasing the capitals at the same price, the People’s Court can divide the assets from transferring equity for both parties. In case over half of the other shareholders don’t support and are unwilling to purchase at the same price, which is regarded that they are in agreement on the transfer, the spouse of the shareholder can become the shareholder of the company.
5. Agreements and solutions to obligations of cash settlement.
Generally, in divorce cases, both parties only reach agreements on the amount and deadline of cash settlements. For instance, the male party should make payment of 100,000 Yuan to the female party. However; there aren’t any penalties for the delay on purpose, in this case, we generally suggest that the following sentences should be added into the agreement,” In case of the delay of payment, the interest of the overdue payment shall be charged by twofold of the current bank loan interest rate as a punishment. “Thus, this measure can make the party aware of the pressure of surcharges and achieve the goal of punishment.
6. Agreements and solutions to costs of child-care expenses.
Generally, the child-care expenses shall be paid till the child reaches the age of 18 or the child can make an independent living. Pursuant to the judicial interpretation of China Supreme Court concerning Marriage Law of the People's Republic of China (implemented on Dec 25th 2001), parents have no obligations to pay child-care expenses after the child graduates from the senior high school. However, in practice, it is quite common that parents continue to support their children when they are in university or even after the college when they couldn’t be financially independently. In our opinion, in case there are no relevant terms and conditions on maintenance in the agreement, the deadline of offering financial aids refers to the finishing of senior high school education while in cases there are specific items regarding maintenance, it should be done in line with the agreement. For instance, in cases parents agree to pay the costs of maintenance until the college graduation and one party refuses to fulfill the obligation after the child goes to college, the child has the right to ask for the costs of maintenance.
In practice, many persons involved, particularly the female party, expect to obtain a lump sum of costs of child-care expenses. Pursuant to the relevant judicial interpretation and practical cases, the court shall not support the requests alike. Usually, the court’s judgment or mediation on paying a lump sum of costs of child-care expenses shall be made under the following circumstances:
1)One party requires a lump-sum payment of child-care expense.
2)The other party agrees to perform a lump-sum payment.
3)The other party has the financial capacity.
4)The request is not proposed at the expense of the other’s rights and interests.
In conclusion, in case one party opposes to conduct a lump-sum payment of child-care expenses, the court shall not support the other party’s request in the lawsuit.
7. Agreements and solutions to the visitation right.
Subject to Marriage Law, after the divorce, the party not having the child custody has the right to visit the child and the other party, including his or her family members, shall not stand in the way. However, in the divorce agreement, both parties always ignore the visitation right, by simply making sure who takes the child custody without more specific provisions on time, place and ways of visitations. Once any disputes concerning the visitation occurs after the divorce, the party involved can do nothing but go to law, bringing unnecessary troubles in money and time. In drawing the divorce agreement, family lawyers often work out agreements concerning the visitation right as follows:
The son/daughter born in wedlock ______ (born on dd/mm/yy) is living with the female party and the male party should pay _____ Yuan for the costs of child-care expense per month until the child is financially independent. The male party has the right to visit the child twice a month, which is on Fridays at odd numbers per month. According to the son/daughter’s will, the male party can visit his child at the contracted place. For special occasions, time and method of visitation can be renegotiated.
Both parties can also make the agreement that the other party picks up the child on Friday and sends him or her back on Saturday or Sunday. More specific information on visitation places and methods can be drawn in the agreement.
Generally speaking, the visitation times shall not be too frequent; otherwise, it may bring much inconvenience to both parties and may influence the child’s daily life and study. When the child reaches the age of 10, specific visitation time and methods can be discussed based on the child’s own independent will.
8. Agreements and solutions to the household registration (Hukou).
After divorce, the transfer of Hukou is also a difficulty in divorce cases. For instance, the Hukou of the female party is still in the house possessed by the male party after divorce. Pursuant to the divorce agreement, the female party should move out her Hukou soon after finishing the procedures of divorce. In the case that the female party refuses to comply with the agreement, causing some loss or troubles, how can the male party deal with the situation? Subject to the current regulations on Hukou management and the court’s judgment, usually the court shall not accept the request on the transfer of Hukou but remit to the local public security agencies. However, the party may get such reply from the public security agencies that the request is not subject to situations of forcing the person moving out his or her Hukou. The problem above is hardly with a way out.
This kind of dispute may occur some time, though the rate of it is not quite high. As the result of the lack of relevant effective regulations, there is always no way for the party involved to take a legal action. Hence, what can we do to prevent the occurrence of such dispute? We consider penalties corresponding to the mental torment and inconvenience on selling the premises as a proper method. Details usually listed as follows:
If the female party is not moving out her Hukou by herself within three month after the procedures of divorce, she shall be fined XX Yuan from the first day of such breach as compensation to the male party. In the process of selling the premises if the Hukou of the female party has exerted any impacts on the housing price, the female party should bear the damages.
Please note that such compensation shall not be defined as fines for breaking the contract, as the moving of Hukou features the character of personal freedom. In case the compensation is defined as contract-breaking fees, the court may not support the party’s request, while the compensation for inconvenience is more proper not against relevant laws and regulations.
In addition, in the process of selling the premises, provided that the Hukou of the female party exerts impact on the housing price, the specific price difference shall be clearly stipulated in the housing contract and inform the female party in the written form.
Generally speaking, the above-mentioned agreements will promote the other party to cooperate for the Hukou transfer in the shortest time. Of course, in drawing the divorce agreement, in case one party doesn’t agree on the compensation clause concerned in the divorce agreement, the other party shall decide whether to take the pros and cons of bearing legal liability. In the written judgment, the court may add the characters “The female party shall move out her Hukou within 30 days after divorce”. But such judgment is usually not easy to execute unless the female party has the destination to move out her Hukou.
9. There is no need to notarize the divorce agreement.
The divorce agreement shall take effect just after completing the procedures of divorce. Before the divorce, even if the divorce agreement is notarized at the public notary office, it cannot take effect. The benefits of notarizing the agreement may show in the judge’s reference in litigations. In our opinion, it is not of great use to notarize the divorce agreement.
10. Signatures of both parties on the divorce agreement don’t mean that the agreement is effective.
As implied by the name, divorce agreement means that both parties expect to get divorced and they have reached agreement on the issues of property division and child-care custody and etc.. However, the agreement on the child custody and division of common properties can become effective just after both parties registering their divorce. In other words, the execution of the agreement is attached with conditions, which can take effect only when the divorce has become a fait accompli.
Whether the agreement takes effect may often catch the eye of both parties. The following situations may usually happen: both parties have reached the agreement and signed for authorization, but one party may regret in the procedures of divorce registration at the marriage registration office of civil affairs bureau and new requests may be brought up. At this time, does the other party have the right to continue the procedures or take a legal action? Will the court surely judge on the basis of the divorce agreement? Our answers to these questions are negative.
First, the divorce agreement is a comprehensive written contract on the issues concerning personal relations, property division and child custody. As for the personal relation: whether the party is in agreement on the divorce cannot bind with the written contract. In other words, in case one party regrets in the process while the other party has registered in the form of important conditions: i.e.: the party has conducted the relevant divorce registration; the fact of divorce shall be mandatory. In case both parties just agree on divorce in the written form and one party regrets in the process of registration, the other party has no right to request mandatory execution or the court shall not be conferred on the right to authorize the divorce.
Second, in divorce agreements, issues on property division, child custody and the like are closely interlinked with the personal relation. In case the divorce registration cannot be approved, the above-mentioned agreements shall not take effect, as the agreements are worked out under a certain environment and the specific mentality of the party. However, once the divorce agreement is worked out and signed by both parties, the contents may often become the important legal grounds for reference to the court. In conclusion, the opinion that the divorce agreement is of little use is completely wrong. |
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