## Facts

- Betty J. Dawley and James R. Dawley executed a premarital agreement providing that each spouse’s earnings and property acquired during marriage would remain that spouse’s separate property.
- At contracting, the parties anticipated the marriage might be short and included a limited support commitment by James for Betty and the expected child.
- The parties married, remained married for several years, had a child, and generally handled their earnings and acquisitions as separate during the marriage.
- James filed for dissolution; the trial court enforced the agreement, found no community property, and awarded James property acquired with his separate funds, including a boat.
- The boat was purchased with a down payment paid by James; both spouses signed a loan for the remaining balance.
- Betty challenged enforceability on public-policy grounds, claimed undue influence, and argued the agreement was later rescinded by the parties’ conduct.

## Issues

1. Whether a premarital agreement allocating earnings and after-acquired property as separate is void as against public policy because the parties anticipated early dissolution when they signed it.
2. Whether the agreement was invalid due to undue influence in a confidential relationship.
3. Whether the parties’ conduct during marriage rescinded or abandoned the premarital agreement.
4. Whether the boat was community property or James’s separate property under the agreement.

## Decision

- The California Supreme Court affirmed enforcement of the premarital agreement and the property characterization.
- The agreement was not void on public-policy grounds merely because the parties contemplated possible early dissolution; invalidity depends on whether the agreement’s terms promote dissolution.
- Substantial evidence supported the trial court’s finding that the agreement was not procured by undue influence.
- The parties did not rescind the agreement by their conduct; their handling of earnings and property was consistent with continuing separate-property treatment.
- The boat was properly classified as James’s separate property despite both spouses signing the loan.

## Legal Principles

- The validity of a premarital agreement does not turn on the parties’ subjective contemplation of divorce, but on the objective terms of the agreement.
- A premarital agreement is void on public-policy grounds only to the extent its terms affirmatively promote dissolution of the marriage.
- Prospective spouses may, by premarital contract, alter the default community-property characterization of earnings and acquisitions during marriage, subject to public-policy limits.
- Undue influence is not established where the record supports voluntariness and absence of overreaching, even within a confidential relationship.
- Rescission or abandonment of a premarital agreement requires clear mutual intent; continuation of separate-property practices supports continued enforceability.
- Property acquired under a valid separate-property arrangement may remain separate even if both spouses sign financing documents, where acquisition is tied to separate funds and the agreement’s allocation rules.

## Conclusion

The court upheld a premarital agreement keeping marital earnings and acquisitions separate, holding that enforceability depends on whether the agreement’s terms promote divorce rather than on the parties’ expectations about the marriage’s duration, and it rejected claims of undue influence, rescission by conduct, and misclassification of property purchased under the agreement.


In re Marriage of Dawley, 17 Cal. 3d 342 (Cal. 1976)