NEW YORK: Prenup agreements under fire in the Appellate Courts

Just because prenups are presumptively enforceable in New York doesn’t mean they will always be upheld. I was reading this blog about a couple of cases in New York appellate courts where prenups were not upheld despite seemingly passing the smell test. It seems the pivotal issue with the case at bar was the “merger clause” in the contract. It is a complicated issue but the short of it is, that at least in some instances, all a party has to do is plead ignorance and claim “fradulent inducement” and then the merger clause is toast.  The author, Neil Cahn wrote:

Holding that summary judgment was not warranted, the appellate court may have increased or changed the burden needed to uphold a prenuptial agreement; changing the role of a contract’s “merger clause.” That clause declares that no factual representations not specifically referenced in the contract may later be used to claim the contract was fraudulently induced. Typically, it is a shield used to protect the agreement from attack. In McKenna, the Second Department suggests a merger clause may be used as a sword: preventing a court from learning the wife’s actual knowledge of the husband’s finances at the time the prenuptial agreement was entered. As that knowledge could only have come from representations of the husband, the merger clause would bar proof of such representations not referenced by the agreement

So what is he talking about? Dunno to tell you the truth. I really didn’t get it.  But it seems like if there is a “merger clause “in the prenup (and, I mean, don’t quote me on this one) usually that would be a bar against attack of the prenup by the challenging party; but in New York, in some instances at least, parties can no longer depend on the merger clause being enforced as a bar to future représentations by either the challenging party or the party who wants the prenup enforced. In other words, merger clause, smerger clause. Know what I mean? This is my reading of what Cahn said; but then again, I am a little bit stomped by this one. I think his article could have been clearer to tell you the truth. He needs to dumb it down a little bit for folks like us. 🙂