Financial Disclosure and Setting Aside a Domestic Contract in Ontario

A domestic contract — whether a marriage contract (prenup), cohabitation agreement, or separation agreement — is only as trustworthy as the financial information it was built on. Ontario's Family Law Act gives courts a specific power to set aside (invalidate) a domestic contract when one party concealed assets, understated income, or otherwise failed to give a complete and honest picture of their finances before the contract was signed.

This is not a technicality. It is a foundational principle: you cannot make an informed agreement about how property will be divided if you don't actually know what property exists. Financial disclosure is the foundation of every enforceable domestic contract.

Why Full Financial Disclosure Is Required

When two people sign a domestic contract, each party is agreeing to terms that may significantly affect their financial future. A separation agreement that waives equalization, for example, is only fair if the party giving up that right knows what they're waiving against — what the other party's net family property actually looks like.

If Party A hides a significant investment account, and Party B signs a waiver not knowing that account exists, Party B has been deceived. The agreement was reached based on false premises. Ontario law recognizes this by giving courts the power to intervene.

What the Family Law Act Says

The Family Law Act allows a court to set aside a domestic contract on several grounds, including a failure to disclose significant assets or significant debts or other liabilities existing at the time the domestic contract was made.

Note the word "significant." Courts do not set aside agreements because one party forgot to list a minor bank account. But they have set aside agreements where one party concealed:

• A pension with substantial commuted value
• Real estate holdings not mentioned during negotiations
• Business interests with significant equity
• Large undisclosed debts (which would have changed the net property calculation)
• Stock options or deferred compensation not reflected in disclosed income

What Adequate Financial Disclosure Looks Like

There is no prescribed form in Ontario for domestic contract financial disclosure, but best practice — and what courts look for — typically includes:

For Each Party:

• Net worth statement listing all assets (with approximate current values) and all liabilities
• Income documentation: recent T4s, tax returns, pay stubs, notices of assessment, or financial statements if self-employed
• Real property: owned properties with estimated current market values, outstanding mortgages
• Pensions: most recent pension statements, including commuted value if available
• RRSPs and TFSAs: current balances
• Business interests: if one party owns or has an interest in a business, some accounting for its value
• Investments: brokerage statements
• Debts: credit cards, lines of credit, student loans, other liabilities

Both parties should exchange this information before the agreement is drafted and before signing. Timing matters — disclosure made after terms are already finalized suggests it was an afterthought.

The Difference Between a Failure to Disclose and a Failure to Ask

An important nuance: courts do not always require that one party actively deceived the other. A passive failure to disclose significant assets can also ground a set-aside application — even if the other party could have asked and didn't.

However, courts do consider whether the other party had an opportunity to conduct their own inquiry. If Party B had every opportunity to ask questions, request financial information, consult their own accountant, and chose not to, that affects the weight given to the non-disclosure.

This is one more reason why independent legal advice (ILA) matters: a good ILA lawyer prompts their client to request sufficient disclosure, and documents that it was provided or that the client made an informed choice to proceed without more.

Other Grounds to Set Aside a Domestic Contract

Beyond non-disclosure, the Family Law Act also allows set-aside applications based on:

• Failure to understand the nature or consequences of the agreement — for example, signing a contract in a language the party doesn't read, or signing while cognitively impaired
• Duress, fraud, or undue influence — being pressured, threatened, or manipulated into signing
• Unconscionability — terms so wildly one-sided that a court declines to enforce them on fairness grounds

These grounds can apply together. A hastily-signed prenup with no ILA, no financial disclosure, presented two days before a wedding by a wealthier partner with all the economic leverage — that's a case that checks several boxes at once.

Challenging an Existing Agreement: What to Expect

If you believe your domestic contract should be set aside, here's a realistic overview:

1. Consult a family lawyer — they'll review the agreement, the circumstances of signing, and the disclosure (or lack of it) that was provided
2. Gather evidence — correspondence, financial documents from around the time of signing, anything showing what was and wasn't disclosed
3. File an application with the Ontario Superior Court of Justice (Family Court)
4. The court balances competing interests — was there non-disclosure? Did you have an opportunity to ask? Were you independently advised? How material was the undisclosed asset to the overall agreement?

Set-aside applications are not quick or inexpensive. Courts prefer to enforce agreements where possible, and they do not lightly unravel domestic contracts between adults who signed them. Strong evidence of material non-disclosure or genuine duress is needed.

Protecting Yourself When Signing

Whether you are the one providing disclosure or the one receiving it:

• Provide everything, even assets you think are minor or "obviously" known
• Ask for everything — if your partner references a business, a pension, or investments, request documentation
• Get ILA — your independent lawyer will prompt you on what to ask for
• Document the exchange — attach financial disclosure as an exhibit to the agreement
• Don't rush — if you are being pressured to sign before you've received adequate disclosure, that is itself a red flag

Frequently asked questions