What are Binding Financial Agreements?
Binding Financial Agreements are agreements entered into by parties in relation to the division of their property. Binding Financial Agreements can be made before the relationship, during the relationship and after the relationship has ended.
The division of property as set out by a Binding Financial Agreement does not need to be just and equitable the way that family law property divisions completed under the Family Law Act 1975 must be.
However, there are strict obligations each party must comply with for this kind of agreement to be binding and enforceable. For example, before signing, parties must obtain legal advice about the effect of the agreement and on their rights and the advantages and disadvantages of entering the agreement and it must be signed by both parties.
By entering into a Binding Financial Agreement, you are effectively dismissing your rights and entitlements pursuant to the Family Law Act 1975. It is therefore very important that you know what those rights and entitlements are or might be before entering into the agreement.
Can a Binding Financial Agreement be set aside?
There are a limited number of circumstances in which a Binding Financial Agreement may be set aside. These include where the agreement was entered into for fraudulent purposes, where circumstances have arisen since the agreement was made which make it impractical for the agreement or part of the agreement to be carried out, or where there has been a material change of circumstances.
As Binding Financial Agreements are a type of contract, the language must be clear and unambiguous, they cannot be entered into by force or under duress, and other principles of law and equity that are used to determining the validity, enforceability and effect of contracts apply.
It is very important to receive legal advice at any stage of the Binding Financial Agreement process for your peace of mind and so that you can have the knowledge you need to make an informed decision about the Agreement.
