What is a binding financial agreement (BFA) in Australia?
A binding financial agreement (BFA) is a private contract between spouses or de facto partners about how their property and financial resources are to be divided on separation, made under Part VIIIA (spouses) or Part VIIIAB (de facto) of the Family Law Act 1975 (Cth). BFAs can be made before, during, or after a relationship. They bind the parties without court approval — but only if strict statutory requirements are met, including independent legal advice for each party.
What a BFA does
A BFA displaces the usual court-based property settlement process under section 79 or 90SM of the Family Law Act 1975 (Cth). Parties agree privately how to divide property, debts, financial resources, and spousal maintenance on separation. The agreement binds without court ratification — unlike consent orders, which require court approval.
Strict formation requirements
Under section 90G (spouses) or section 90UJ (de facto), a BFA is binding only if: each party received independent legal advice from a different lawyer before signing; each lawyer signed a statement confirming advice given on effect and advantages/disadvantages; the agreement is signed by the parties; and each party was given a signed copy. Any non-compliance is fatal.
When courts set BFAs aside
Under section 90K (spouses) or section 90UM (de facto), a court can set aside a BFA for: fraud or material non-disclosure; undue influence or unconscionable conduct; impracticality due to changed circumstances; material change relating to a child of the relationship; or where enforcement would cause hardship. Set-aside applications are expensive — $50,000-$200,000+.
How I help family lawyers with BFAs
I draft BFAs in current Part VIIIA/VIIIAB format, check section 90G compliance, produce the "effect and advantages" advice document for the file, and review opposing agreements for set-aside grounds. BFAs are technically demanding — I reduce drafting and review time significantly.
Common issues
- The same lawyer cannot advise both parties — this alone voids most defective BFAs
- Financial disclosure should be annexed — hidden assets lead to set-aside
- Birth of a child after the agreement can ground set-aside on hardship grounds
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