The opinion of the court was delivered by: Handler, J.
On certification to the Superior Court, Appellate Division, whose opinion is reported at 307 N.J. Super. 150 (1998).
The issue raised in this appeal is the enforceability of a divorce judgment incorporating a property settlement agreement that authorized the termination of the husband's support and maintenance payments in the event of the wife's cohabitation with an unrelated male.
Kathleen and Lawrence Konzelman were married for twenty-seven years at the time of their divorce. Their final divorce decree, entered on October 28, 1991, incorporated a Property Settlement Agreement both parties had entered into with the benefit of counsel. Section 1(D) of that Agreement dealt with alimony. It provided that Mr. Konzelman's support and maintenance obligation of $700.00 per month would terminate should Mrs. Konzelman undertake cohabitation with an unrelated adult male for a period of four continuous months.
In February of 1993, Mr. Konzelman hired a private investigator, Noel J. Kirkwood, to verify whether Mrs. Konzelman was living with anyone. Mr. Kirkwood undertook surveillance of Mrs. Konzelman's residence seven days a week for 127 days, mostly in the evening, nighttime, and early morning hours. Mr. Konzelman also hired L.S. Stephens, Inc., a private investigation agency, to overlap with Mr. Kirkwood in the last week of his surveillance.
The investigator reported on various activities of an "unrelated adult male" at Mrs. Konzelman's home. Specifically, Mr. Kirkwood observed that person, Mr. Roger Liput, return to Mrs. Konzelman's residence most evenings. He left the residence most mornings to go to work. Mr. Liput used the garage door to gain access to the garage and parked his car there. He picked up the newspaper on a regular basis and did yardwork around the residence. He answered the door to the home. He also used Mrs. Konzelman's number as a contact number for members of his softball team.
Relying on that information, Mr. Konzelman terminated alimony payments on June 26, 1993. On August 4, 1993, Mrs. Konzelman filed a Notice of Motion and accompanying certification denying cohabitation and demanding, among other things, the resumption of alimony payments and the payment of arrearage. In response, Mr. Konzelman filed a cross-motion, seeking to terminate support and maintenance. He provided certifications from four private detectives regarding Mrs. Konzelman's living arrangements; Mrs. Konzelman provided certifications rebutting those allegations. The trial court ordered Mr. Konzelman to pay support arrears and resume payment until a plenary hearing could be held.
The plenary hearing was conducted over thirteen days and included twenty-six witnesses. During the hearing, it was established that Mrs. Konzelman and Mr. Liput had a monogamous romantic relationship, which included not only spending time together at Mrs. Konzelman's home, but also vacations together abroad and at the Jersey Shore, for which Mr. Liput paid almost all the expenses. They spent holidays together with other members of their families. They had a joint savings account. Mr. Liput also performed many household chores, including mowing the lawn, gardening, and maintaining the above-ground pool, which he bought for Mrs. Konzelman. Although Mr. Liput did not have a key to the premises, he did know the code necessary to disarm the alarm system and enter the residence.
The trial court determined that Mr. Konzelman had established cohabitation. The court held, however, that the provision of the Agreement authorizing termination of alimony on cohabitation was invalid. Nevertheless, because Mr. Konzelman had established cohabitation, the court conducted a plenary hearing to determine to what extent Mr. Liput was either providing or receiving support from Mrs. Konzelman. The trial court determined that Mrs. Konzelman was receiving at least $170 per week from unidentified sources, which was attributed to Mr. Liput. Mr. Konzelman's support obligations were reduced accordingly.
Mr. Konzelman appealed, challenging the trial court's refusal to enforce the cohabitation provision of the Agreement. Mrs. Konzelman filed a cross-appeal, contesting the factual determination of cohabitation and the subsequent modification of alimony. The Appellate Division reversed. 307 N.J. Super. 150 (1988). It construed cohabitation as a domestic relationship whereby two unmarried adults live as husband and wife. Id. at 159. The court then held that "a provision of a property settlement agreement, freely entered into, which causes permanent alimony to terminate if the dependent spouse enters into a new relationship which has all the indicia of marriage except a license is enforceable." Id. at 161.
We granted plaintiff's petition for certification, 153 N.J. 405 (1998).
New Jersey has long espoused a policy favoring the use of consensual agreements to resolve marital controversies. Voluntary agreements that address and reconcile conflicting interests of divorcing parties support our "strong public policy favoring stability of arrangements" in matrimonial matters. Smith v. Smith, 72 N.J. 350, 360 (1977). The prominence and weight we accord such arrangements reflect the importance attached to individual autonomy and freedom, enabling parties to order their personal lives consistently with their post-marital responsibilities. E.g. Faherty v. Faherty, 97 N.J. 99, 107 (1984) (recognizing that divorcing parties are free to bind themselves to arbitrate disputes over alimony). Thus, it "would be shortsighted and unwise for courts to reject out of hand consensual solutions to vexatious personal matrimonial problems that have been advanced by the parties themselves." Petersen v. Petersen, 85 N.J. 638, 645 (1981). For these reasons, "fair and definitive arrangements arrived at by mutual consent should not be unnecessarily or lightly disturbed." Smith, supra, 72 N.J. at 358. The very consensual and voluntary character of these agreements render them optimum solutions for abating marital discord, resolving matrimonial differences, reaching accommodations between divorced couples, and assuring stability in post-divorce relationships. Peterson, supra, 85 N.J. at 645. See Gordon v. Gordon, 675 A.2d 540, 544 (Md. 1996) (stating that "separation agreements . . . are generally favored by the courts as a peaceful means of terminating marital strife and discord so long as they are not against public policy").
Divorce agreements are necessarily infused with equitable considerations and are construed in light of salient legal and policy concerns. Petersen, supra, 85 N.J. at 642. The interpretation, application, and enforceability of divorce agreements are not governed solely by contract law. "[C]ontract principles have little place in the law of domestic relations." Lepis v. Lepis, 83 N.J. 139, 148 (1980). Thus, settlement agreements, if found to be fair and just, are specifically enforceable in equity. Schlemm v. Schlemm, 31 N.J. 557, 581-82 (1960).
The adoption of a property settlement into a divorce decree does not render it immutable. Courts have continuing power to oversee divorce agreements, Corbin v. Mathews, 129 N.J. Eq. 549, 552 (E. & A. 1941), and the discretion to modify them on a showing of "changed circumstances," Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970), that render their continued enforcement unfair, unjust, and inequitable. Lepis, supra, 83 N.J. at 154-55. The Court observed in Lepis, supra:
"When we first upheld the specific enforceability of spousal agreements in Schlemm, we relied on the flexible power of equity to enforce such agreements only to the extent that they were fair and equitable." [Id. at 148-49.]
Alimony, maintenance and support, for a dependent spouse, may clearly be the subject of a voluntary and consensual agreement undertaken as part of the termination of marriage and divorce. Schlemm, supra, 31 N.J. at 576-82 (1960); Sobel v. Sobel, 99 N.J. Eq. 376, 379 (E. & A. 1926). The issue of maintenance and support between divorced parties implicates important statutory and policy concerns. New Jersey requires that a dependent spouse receive alimony to assure maintenance sufficient to support that spouse based on the living standards of the couple during marriage. N.J.S.A. 2A:34-23; Innes v. Innes, 117 N.J. 496, 503 (1990); Koelble v. Koelble, 261 N.J. Super. 190, 192-93 (App. Div. 1992). The primary purpose of alimony is to permit the spouse to share in the accumulated marital assets to which he or she contributed. Mahoney v. Mahoney, 91 N.J. 488, 500-01 (1982).
Like other spousal agreements, those covering alimony may be modified in light of changed circumstances. "The equitable authority of a court to modify support obligations in response to changed circumstances, regardless of their source, cannot be restricted." Lepis, supra, 83 N.J. at 149. Permanent alimony terminates automatically on remarriage. N.J.S.A. 2A:34-25. In enacting that basis or condition for discontinuing alimony, the Legislature articulated a public policy that the legal obligation of the supporting spouse is superseded and ends on the remarriage of the dependent spouse. In effect, the new marriage bond itself creates a change of circumstances that the Legislature deemed sufficiently fundamental and important to require the automatic termination of alimony. The legal obligation of post-divorce alimony is derived from the antecedent marriage; a new marriage supplants that obligation. Gayet v. Gayet, 92 N.J. 149, 151 (1983). Hence, remarriage justifies the termination of alimony without regard to the economic circumstances of the dependent spouse who has remarried.
The initial issue posed in this case is whether the dependent spouse's new relationship, characterized as one of cohabitation, can itself be considered a change of circumstances. In Gayet, supra, 92 N.J. at 154-55, the Court determined that cohabitation of the dependent spouse without more was not a changed circumstance that could justify the reduction or termination of alimony by the supporting spouse. Cohabitation constitutes a change of circumstances only if coupled with economic consequences; the economic benefit enuring to either cohabitor must be sufficiently material to justify relief. Ibid. Under this economic needs test, the reduction in alimony is granted in proportion to the contribution of the cohabitor to the dependent spouse's needs. Ibid.
The question, therefore, is whether an agreement between the parties to allow cohabitation to terminate alimony obligations can be a valid basis for discontinuing alimony, without regard to the economic consequences of that relationship. We are satisfied that the policy considerations that allow the termination of alimony on remarriage support the termination ...