A BFA isn't legally binding just because both of you signed a piece of paper. Australian law, specifically ss. 90G and 90UJ of the Family Law Act 1975, sets out strict formal requirements. Get one wrong, and your BFA can be challenged or set aside.
Different things decide whether a BFA holds up, and it helps to keep them apart. Points 1, 2, 5 and 6 below are formal requirements: miss one and the agreement was never binding in the first place. Points 3 and 4 are grounds a court can rely on to set aside an agreement that was perfectly valid when it was signed. Point 7 is neither, and is a limit on what a BFA is allowed to deal with at all.
Here's what to get right:
1. Written Document (Section 90G(1)(a))
The agreement must be in writing. No verbal agreements, no handshake deals, no email chains. It must be a formal, executed document signed by both parties.
Pro tip: Use clear, plain language. Courts interpret ambiguous BFAs against the drafter (contra proferentem rule). Don't leave room for interpretation.
2. Independent Legal Advice (Section 90G(1)(b) & (c))
This is the big one. Each party must:
(a) Receive advice from a different, independent legal practitioner
- You can't use the same lawyer
- You can't use lawyers from the same firm
- The lawyer must be admitted to practice in Australia
(b) Be advised on specific matters:
- The effect of the agreement on their rights
- The advantages and disadvantages, at the time the advice is given, of making the agreement
(c) Signed Legal Advice Certificate (Section 90G(1)(c) and (ca))
Before signing the BFA, each party's lawyer must provide a signed certificate confirming they gave the required advice. The lawyer gives their client a signed statement that the advice was provided, and a copy must be given to the other party or their lawyer. It does not have to be annexed to the agreement.
What happens if there's no certificate?
The agreement is not binding, unless a court declares it binding under s 90G(1A) because it would be unjust and inequitable not to.
Example statement (s. 90G(1)(c)):
Statement of Independent Legal Advice
I, [Lawyer Name], of [Law Firm], state that:
- I am a legal practitioner qualified to practise law in Australia.
- I provided independent legal advice to [Client Name] before they signed this Binding Financial Agreement dated [Date], about:
(a) the effect of the Agreement on the rights of my client; and
(b) the advantages and disadvantages, at the time the advice was provided, to my client of making the Agreement.Signed: ____________________
Date: ____________________
3. Full Financial Disclosure (Section 90K(1)(a))
Disclosure is not one of the formal requirements. A BFA is still binding without it, and nothing in s. 90G asks for it. What it does is protect the agreement from being unwound later, which is why it belongs on this list.
Both parties should give full and frank disclosure of their financial circumstances. This includes:
Assets:
- Real property
- Bank accounts and investments
- Superannuation
- Business interests
- Personal property (cars, jewellery, etc.)
- Trust interests and future inheritances (if known)
Liabilities:
- Mortgages and secured debt
- Personal loans and credit cards
- HECS/HELP debt
- Guarantees and contingent liabilities
Why this matters:
Section 90K(1)(a) allows a court to set aside an agreement obtained by fraud, which expressly includes non-disclosure of a material matter. Courts take this seriously. If you hide a $500k inheritance, your BFA can be set aside.
Pro tip: Use sworn financial statements or statutory declarations. Exchange them before signing the BFA. Keep copies forever.
4. Voluntary Agreement (No Duress, Undue Influence, or Unconscionable Conduct)
Under s. 90K(1), a BFA can be set aside if:
- It was obtained by fraud (s. 90K(1)(a))
- A party entered into it under duress or undue influence, which makes the agreement voidable (s. 90K(1)(b))
- A party engaged in unconscionable conduct in making the agreement (s. 90K(1)(e))
Examples of duress:
- "Sign this BFA or I'll leave you"
- "Sign this or you can't see the kids"
- Presenting the BFA 10 minutes before the wedding
Examples of unconscionable conduct:
- One party has significantly greater bargaining power and exploits it
- One party didn't understand the legal effect (despite receiving advice)
Pro tip: Give each party time to consider the BFA (at least 2–4 weeks). Don't pressure them. Document the process (emails, diary notes) to prove voluntariness.
5. Compliance with Sections 90B, 90C, or 90D (or 90UB, 90UC, or 90UD)
Your BFA must fall into one of three timing categories. For married couples:
- Section 90B: Before the marriage
- Section 90C: During the marriage, including after separation up until a divorce order is made
- Section 90D: After a divorce order
For de facto couples, the equivalent sections are:
- Section 90UB: Before the de facto relationship
- Section 90UC: During the de facto relationship
- Section 90UD: After the de facto relationship breaks down
Make sure your BFA references the correct section and meets its specific requirements.
6. Proper Execution (Signing)
Both parties must sign the BFA. Each party's lawyer must also sign their s. 90G certificate. Some lawyers recommend:
- Signing in counterpart (each party signs their own copy)
- Witnessing signatures
- Dating all signatures
Pro tip: Keep original signed copies safe. You'll need them if you ever separate.
7. Child Support Is Dealt With Separately
Child support is governed by the Child Support (Assessment) Act 1989, not by your BFA. If a BFA does make provision for a child's maintenance, that provision is void unless it specifies the child and the amount provided for them (s. 90E).
You can agree on spousal maintenance in a BFA, but child support runs under its own legislation.
Common Mistakes That Cost People Their BFA
- No legal advice certificates: BFA is not binding (subject to s 90G(1A))
- Same lawyer for both parties: BFA is likely invalid
- Incomplete financial disclosure: Risk of s. 90K challenge
- Pressure to sign: Risk of duress claim
- Unconscionable terms: Risk of s. 90K setting aside
- Ambiguous drafting: Courts may refuse to enforce
What Happens If a BFA Is Invalid?
If your BFA doesn't meet these requirements, it's not binding. The Family Court will ignore it and proceed with standard s. 79 property division. All that time and money spent on the BFA? Wasted.
The Bottom Line
BFAs have strict formal requirements for a reason: to protect both parties. Don't cut corners. Don't skip legal advice. Don't hide assets.
Get it right, or don't bother.
