A recent Court of Appeal ruling in the cohabitation case of Ely and Robson has set a potentially dangerous precedent as to what makes a binding agreement between parties.

The case involved a dispute between a former couple with 2 children who had lived together in a home solely owned by just one of the parties (Ely). The couple separated and eventually reached an agreement through discussions, the terms of which were recorded in a letter from one of the parties lawyers.

The agreement was that Ely would continue to own the property, but hold it on trust for Robson for life, with the remainder 80% for Ely's heirs and 20% for Robson.

However, Robson later sought to argue that she wouldn't have accepted anything less than an equal share of the property.

Unfortunately for Robson, the Court of Appeal dismissed her case and ruled the oral agreement was binding - the parties had acted in accordance with their agreement.

What does this case tell us?

There's an ever increasing demand for family cases to be agreed between the parties, without involving the Courts and whilst mediated agreements aren't meant to be binding and parties should always seek legal advice - this doesn't always happen. Something I often see in practice.

So a word of warning: parties should be very careful not to agree anything unless they're 100% clear on what has been agreed, because it could be treated as binding on them in any event.