cohabitation agreement business definition

Is a cohabitation agreement considered legally binding in all legal jurisdictions? Are there any particular issues to consider in drawing up one of these agreements?

The legal consequences of cohabitation vary. Although cohabitation may not, by itself, give a party rights in the other cohabitant's property, one party may assert the existence of an agreement regarding the ownership of property or promised compensation which the other party disputes. The legal effect of cohabitation agreements has not been tested in every jurisdiction. However, a cohabitation agreement which would be respected as contract under local law and is supported by valid consideration should be enforceable. (Valid consideration would be, for example, the parties' mutual promises relating to property rights or the provision of services, but not their agreement to maintain a sexual relation.) It is important to recognize that the cohabitation agreement may not be self-effectuating with respect to the rights the parties wish to confer on each other. For example, if a party wishes the other to have the right to make medical decisions for him or her, the party should execute the health care proxy or other document recognized in the jurisdiction.

Stephen F. Lappert, Partner, Trusts and Estates Department, Carter Ledyard & Milburn LLP, New York, NY