How Does a Binding Financial Agreement (BFA) Work? The Legal Essentials You Need to Know

If you’re considering a Binding Financial Agreement (BFA) — whether before, during, or after a relationship — it’s important to understand exactly how it works legally.

At The Aussie Love Lawyer, I believe clarity is power. So here’s your straight-talking guide to the legal nuts and bolts of a BFA in Australia: what makes it binding, what steps are legally required, and how to make sure yours is done properly (so it actually holds up).

🧾 What Is a BFA?

A Binding Financial Agreement is a private, legally enforceable contract between two people that outlines how their finances, assets, and liabilities will be dealt with if the relationship ends. It can also address spousal maintenance, debts, and future financial arrangements.

BFAs are an alternative to court proceedings or consent orders — and when done correctly, they’re just as powerful.

✅ What Makes a BFA Legally Binding?

For a BFA to be legally enforceable under the Family Law Act 1975, it must meet several strict legal requirements. If any of these elements are missing, the agreement can be challenged or set aside.

Here’s what you must have:

1. Voluntary Agreement (Consent)

Both parties must enter into the BFA freely and voluntarily. Any signs of coercion, pressure, or unfair conduct can invalidate the agreement.

💡 A BFA is not something you should ever be pressured into signing. It must be a genuine, informed choice.

2. Full and Honest Financial Disclosure

Each party must provide a complete and accurate picture of their financial situation — including assets, liabilities, income, superannuation, and any expected inheritances.

🔍 Failing to disclose something material — even accidentally — could later be grounds for the agreement to be set aside.

3. Independent Legal Advice

Both parties must receive independent legal advice from separate, qualified lawyers. This advice must cover:

• The effect of the agreement on their rights, and

• The advantages and disadvantages of signing it.

Each lawyer must sign a Certificate of Advice, confirming they’ve advised their client appropriately. This certificate forms part of the agreement.

👥 This is not optional — it’s a strict legal requirement. You can't share a lawyer or skip the advice step.

4. Properly Signed and Executed

The BFA must be in writing and signed by both parties. It should also include the Certificates of Legal Advice and be correctly dated and stored. No emails or handshakes — this is a formal legal document.

5. Complies with the Family Law Act

The BFA must meet all the technical requirements under the Family Law Act 1975, including the relevant sections (e.g. s90B, s90C, s90D for married couples; s90UB, s90UC, s90UD for de facto couples).

⚖️ It’s not enough to just agree on terms — the format and structure must comply with the law. That's where an experienced family lawyer comes in.

🚫 When Can a BFA Be Set Aside?

Even if a BFA ticks all the boxes initially, it can later be set aside by a court if:

• There was fraud, non-disclosure, or duress,

• The agreement is found to be unconscionable or grossly unfair,

• Circumstances change significantly,

• One party didn’t receive proper legal advice.

This is why getting it right from the start matters. You want an agreement that stands the test of time and law.

🛠️ How The Aussie Love Lawyer Can Help

I specialise in making BFAs clear, compliant, and completely tailored to your situation. I offer:

• Full-service BFA drafting, or

• Independent legal advice only (if you've already got a draft),

• Fixed fees — so you know what you’re paying upfront,

• All done online — no court, no stress, no stuffy offices.

💬 Ready to Do It Properly?

Whether you're entering a new relationship, already partnered, or finalising a separation, getting your BFA right is key to protecting your future.

📅 Book your free discovery call today and let’s get your agreement done right — with no surprises.

⚠️ Disclaimer:

This article is general information only and does not constitute legal advice. You should always consult a qualified family lawyer for advice tailored to your specific circumstances.