“Domestic Contracts” The Effect of Family Contracts; The Malaysian Law Perspectives

Abstract

A domestic contract refers to agreement between persons having family relationship and despite the general rule of contract, that parties in social, domestic and family agreements do not have intention to create legal relations, domestic contracts are legally binding. In the context of family law, domestic contracts normally involves marriage contracts and separation agreements which includes among others; pre-nuptial agreement, settlement agreement, division of matrimonial property agreement and custody of children agreement. Despite the common nature and structure of domestic contract as a typical agreement, there are concerns by the family law practitioners that domestic contracts should be interpreted differently from the commercial or other types of contract and judges should have special or additional factors of consideration in giving effect to the contracts.

In Malaysia, there is a proposal for the formation of a Family Court to improve procedures and providing a better service to families.  The main objective of the Family Court is to empower the parties to resolve their disputes by mutual consent and in a manner that best serves the needs of the children involved.  With the proposal for the establishment of family court, it is very important for the issues on interpretation and effect of domestic contract to be highlighted. This paper discusses and compare the approaches which the courts applied in dealing with domestic contracts and commercial contracts. Research methodolgy adopted in this paper are statutory and doctrinal analysis.