POSTNUPTIAL AGREEMENTS - UW Law School

WILLIAMS - FINAL 11/29/2007 4:07 PM
850 WISCONSIN LAW REVIEW
Because couples think that they will live happily ever after, they do not
make contingency plans for divorce and do not write prenuptial
agreements. Postnuptial agreements should be less affected by
optimism. Optimism undoubtedly wanes as the relationship progresses.
The honeymoon ends, and the real trials and tribulations of marriage
inevitably begin to erode spouses’ faith in their futures. Indeed, marital
happiness usually declines sharply in the early years of marriage and
never rebounds. 120
Finally, it is likely that any attempt to write a prenuptial agreement
will also be futile. In order to write a useful prenuptial agreement, a
couple must anticipate events that might occur in the distant future and
must also anticipate their reactions to novel circumstances such as
having a child, losing employment, or obtaining an unexpected job
offer. People are notoriously bad at predicting their own futures 121 and
are even worse at predicting their emotional reactions to future
circumstances. 122 These factors make it difficult, if not impossible, to
set out a prenuptial contract. Postnuptial agreements do not suffer from
these problems. There is significantly less need to anticipate events in
the far future because postnuptial agreements can react to spouses’
immediate concerns.
B. Potential Efficiency Costs
Although renegotiating a marital contract can have many benefits, it
is not free from costs. 123 In addition to the costs of bargaining and the
costs of writing a new contract, the mere possibility of renegotiation
introduces uncertainty into the relationship. This undermines one of the
underlying purposes of the contract: to provide clear incentives for each
spouse to invest efficiently in the marriage. Professor Ian Smith has
argued that “there is a trade-off between the ex ante incentive benefits
for marriage specific investments of commitment to a no renegotiation
provision and the costs of foregoing welfare enhancing ex post contract
percent of college men and six percent of college women thought that they would ever
get a divorce).
120. Jody VanLaningham et al., Marital Happiness, Marital Duration, and the
U-Shaped Curve: Evidence from a Five-Wave Panel Study, 79 SOC. FORCES 1313,
1329–31 (2001) (reporting that marital happiness declines significantly in the early
years of marriage and then levels off until late in the marriage, when it declines again).
121. See Baker & Emery, supra note 115, at 443.
122. GILBERT, supra note 114, at 175–80 (noting that people often mispredict
their reactions to future events because they underestimate the degree to which they will
adjust to both positive and negative events).
123. Christine Jolls, Contracts as Bilateral Commitments: A New Perspective
on Contract Modification, 26 J. LEGAL STUD. 203, 207 (1997).