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Binding Financial Agreement

Perth Property Settlement Lawyers with legal experience to handle your Family Law matter
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Binding Financial Agreement and Consent Orders

When a relationship comes to an end, parties can agree without the need for the court’s intervention to separate their assets. This may be done through agreement either by the assistance of mediation, the parties’ lawyers or parties themselves without any third party.

On achieving this desirable outcome, there are two ways of formalising the agreement reached:

a binding financial agreement (BFA); or
consent orders.

A BFA is a private contract like any other contract, whereas consent orders are court orders made through a formal court process either at the end of a relationship or during where the court determines it is just and equitable to make orders for the splitting of a couple’s assets.

A binding financial agreement (BFA) is a binding and enforceable contract between the parties, subject both to rules of contract and the strict terms of the Family Law Act that allows for BFAs. It can only deal with financial or property matters. A BFA can be entered into at any time during a relationship such as before living together, during cohabitation, during a marriage, after separation, or after divorce. Whereas, Consent Orders need to be finalised by the Court and can deal with all of the family issues financial, parenting, spousal maintenance and child support if the need arises.

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Binding Financial Agreement and Consent Orders
FAQ - Frequently Asked Questions

What is a binding financial agreement?

A BFA is an agreement that clearly sets out the details of a property settlement and how you are dividing your assets. This includes a brief background of the relationship, assets that each party had prior to the relationship, assets the parties acquired during the relationship and what assets will be retained by either party now that the relationship has ended.

It is essential that a BFA is properly drafted to clearly set out what each party receives in the settlement including any payments of spousal maintenance.

A poorly drafted BFA, or a BFA not strictly in terms of the relevant sections of the Family Law Act, has high probability of failure and unenforceable.

Therefore, careful consideration needs to be given to the terms of any BFA and significant time spent to ensure that it is properly and fully drafted, taking into account all of the factors required.

BFAs like all legal documents, if not drafted correctly, can be challenged if a dispute arises. If we are to draft a BFA we will ensure that it is prepared as to stand the scrutiny of the court.

Advantages of a Binding Financial Agreement

Drafting a BFA is at the discretion of the parties and is therefore more time efficient.
The parties can divide the assets in a manner which suits them and the agreement can still be binding (as long as both parties receive independent legal advice in relation to the BFA). In contrast, Consent Orders will be considered by the Court and orders made where the court determines the split and just and equitable.
Can be entered into at any time during a relationship (before living together, during cohabitation, during a marriage, after separation, or after divorce).

Disadvantages of a Binding Financial Agreement

Both parties must obtain their own independent legal advice and be provided a solicitors certificate of the advice given. Their solicitor must clearly explain the advantages and disadvantages of the party signing the Binding Financial Agreement. Failure to obtain such advice will almost certainly mean that the BFA is unenforceable.
A BFA can be found to be unenforceable if poorly drafted or if it was entered into under duress.
Any ambiguous terms can be interpreted to favour the party that did not draft the BFA.
An application to the Court to enforce a BFA is more complicated as the Court will need to determine that the BFA is both valid and enforceable.
Unlike a court order, a BFA will not provide a final solution or certainty until it is considered and endorsed by the court.
The costs in properly drafting a BFA and its advice is significant, although, this must be considered in the context of the value of the overall assets.

Features benefits from Appius Lawyers

01

You Work Directly with A Solicitor

One of the primary benefits of hiring Appius Lawyers is that you’ll receive personalised service.

02

Expertise and Creative Solutions

Appius Lawyers is much smaller than the mega-firm, but we offer clients expertise and creative solutions at a cost that many larger firms simply can’t match.

03

More Flexibility with Fees

One of the top benefits of working with Appius Lawyers is having more flexibility when it comes to billing structure.

04

Small Business-Friendly

The great thing about working with Appius Lawyers is that we focus and take the time to learn your industry, to understand your business and what we can do to help it move forward.

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