A binding financial agreement (BFA) made under the Family Law Act 1975 (Cth) is enforceable only if it satisfies the Act's procedural requirements and survives the grounds for set-aside that the statute and equity together preserve. The agreement's force derives not from contract principles alone but from a statutory framework that simultaneously creates the mechanism for private ordering and fixes the conditions under which a court will decline to give effect to what the parties signed.
Binding effect requires strict compliance with Family Law Act 1975 (Cth) s 90G. An agreement is binding only if it is signed by all parties and, before signing, each party was provided with independent legal advice from a legal practitioner about the effect of the agreement and the advantages and disadvantages, at the time that advice was given, of making it. The advising solicitor must sign a certificate confirming that the requisite advice was given, and a copy of that certificate must be provided to the other party.
The legislative scheme for financial agreements covering married parties spans several provisions: Family Law Act 1975 (Cth) s 90B governs agreements made before marriage, dealing with how property and financial resources will be treated if the marriage breaks down; Family Law Act 1975 (Cth) s 90D provides for financial agreements made after divorce. Family Law Act 1975 (Cth) s 90E and Family Law Act 1975 (Cth) s 90F operate within the same statutory scheme and bear on the operative effect of agreements and associated declarations.
The independent advice requirement is not a technicality capable of being cured by common-sense inference. Courts have consistently treated the absence of a certificate as a jurisdictional defect. Section 90G(1A) provides a residual curative discretion: where the formal requirements have not been met, a court may nonetheless treat the agreement as binding if, having regard to all the circumstances, it would be unjust and inequitable not to do so. The inverse limb is equally important: technical compliance does not insulate an agreement from challenge on substantive grounds.
The grounds for non-enforcement are found primarily in s 90K of the Act, which includes fraud (including non-disclosure of a material matter), the agreement being void, voidable or unenforceable, unconscionable conduct in connection with making the agreement, a material change in circumstances since execution such that a party would suffer hardship if the agreement were enforced, and failure to comply with the agreement's terms.
Unconscionable conduct is the most litigated ground. It received its most authoritative treatment in Thorne v Kennedy [2017] HCA 49. The applicant in that case was a foreign national who came to Australia to marry the respondent, and signed two BFAs in circumstances of emotional dependence, inadequate time for consideration, and explicit pressure that the relationship would not continue without her signature. The High Court set aside both agreements on grounds of unconscionable conduct under equitable doctrine, holding that the applicant's vulnerability and the respondent's exploitation of that vulnerability were sufficient, without requiring proof of independent wrongdoing beyond the circumstances of execution. The Court also confirmed that misleading or deceptive conduct under the Australian Consumer Law can apply to representations made during BFA formation, extending the available grounds for challenge beyond those enumerated in s 90K.
Non-disclosure operates as a distinct ground from unconscionable conduct, though the two often arise on the same facts. A party who fails to disclose material assets, liabilities, or financial interests gives the other party grounds to challenge enforceability regardless of whether the non-disclosure was deliberate. The relevant question is whether the undisclosed matter was material to the agreement as made, not merely to a hypothetical better-informed negotiation. Lack of capacity at the time of execution, whether from cognitive impairment, illness, or intoxication, can support a challenge under general contractual principles as preserved by the Act.
Note: The s 90G(1A) curative discretion and the s 90K set-aside grounds operate independently. An agreement may survive technical non-compliance under s 90G(1A) and still be set aside for unconscionable conduct or material non-disclosure under s 90K. Practitioners advising on enforceability need to run both analyses: clearing the formal hurdle does not answer the substantive question.
The court's approach to procedural non-compliance under s 90G was addressed in Mallet v Mallet [2005] FamCA 135. That decision articulated the principle that a court examining whether to treat a non-compliant agreement as binding under the curative discretion must assess whether enforcing the agreement would be manifestly contrary to the interests of justice, having regard to the nature and extent of the non-compliance, the parties' reasonable expectations at the time of execution, and the practical consequences of enforcement.
Post-separation challenges raise particular difficulties where the agreement has already shaped the parties' conduct: for example, where one party declined to pursue superannuation splitting, delayed property claims, or made decisions about asset disposal in reliance on the BFA's terms. Courts treat demonstrated reliance as relevant to the interests of justice analysis, though it does not preclude set-aside where the substantive grounds are sufficiently established.
The question of how far BFAs insulate parties from revisitation after materially changed circumstances — including whether an agreement can preclude a party from seeking further orders where intervening changes have undermined the agreement's original purpose — remains an active area of litigation.
Where a BFA is set aside, the court's jurisdiction under s 79 to make property settlement orders revives entirely. The practical consequence is not simply that the agreement fails, but that the parties are returned to full litigation exposure on the financial settlement, often years after the events that generated the agreement.
Practitioners tracing the line of authority on binding financial agreement enforceability, from the procedural compliance cases under s 90G through to the High Court's treatment of unconscionable conduct in Thorne v Kennedy, can run that research in Habeas, where results from 300,000+ Australian legal documents are cited to paragraph level with the underlying extracts available for immediate review.
