Can a Binding Financial Agreement Be Overturned?
By Aryan Jani 
26 September 2025 · Read time: 9 minutes
While BFAs provide financial certainty for couples, courts may set them aside for fraud, non-disclosure, duress, undue influence, unconscionability, impracticability, or major changes affecting children.
In practice, while the courts have the power to intervene, the threshold for successfully challenging a BFA is high, and only clear evidence of serious legal or equitable wrongdoing will result in the agreement being overturned.
Requirements of a Binding Financial Agreement
Let’s begin by looking at the core requirements of a BFA, because it is when these are not met that a court may set the agreement aside.
For a BFA to be binding and enforceable, it must:
- Be in writing and signed by both parties.
- Be entered into voluntarily, without pressure, duress, or undue influence.
- Include full financial disclosure so both parties understand the true financial picture.
- Be made with independent legal advice. Each person must receive advice from their own lawyer on:
- How the agreement affects their legal rights, and
- The advantages and disadvantages of signing.
- Include a signed statement from each lawyer confirming that advice was given.
- Identify the correct section of the Family Law Act under which it is made, depending on whether the couple is married, planning to marry, in a de facto relationship, or separated.
When will a Court set aside a Binding Financial Agreement?
If these requirements are not satisfied, the agreement may be vulnerable to challenge - the Family Law Act sets out specific circumstances in which a court can set aside (overturn) a BFA, including:
Fraud or misrepresentation
If one party lies, hides assets, or fails to provide full financial disclosure, the agreement may be set aside. Fraud might involve undervaluing property, concealing bank accounts, or misleading the other party about their financial position.
For example, in Adame & Adame [2014] FCCA 42, the husband concealed the existence of substantial property he owned overseas. Because the wife had no chance to make enquiries about these assets, the court found this was material non-disclosure and set the agreement aside.
Duress, undue influence, or unconscionable conduct
A BFA will not stand if one party was pressured, manipulated, or unfairly taken advantage of. Duress might include threats to cancel a wedding, while unconscionable conduct arises when one person exploits the other’s vulnerability.
The High Court’s decision in Thorne v Kennedy [2017] HCA 49 is a leading example. Ms Thorne, a 36-year-old with limited English and no substantial assets, was pressured by her wealthy fiancé to sign a BFA just days before their wedding. Her solicitor warned her not to sign, but she was told the wedding would be cancelled if she refused. With her visa soon to expire, she had little choice. The Court found that Mr Kennedy had applied undue pressure and acted unconscionably, and the BFA was set aside.
When assessing these claims, courts look at factors such as bargaining power, the presence of threats or coercion, and whether one party understood what they were signing.
Importantly, a BFA does not need to be "fair" in the ordinary sense. Couples can agree to an uneven division if they both received proper advice. However, if an agreement is extremely one-sided and one party had little bargaining power, this may point to undue influence or unconscionability.
Agreement is void, voidable, or legally unenforceable
An agreement may be unenforceable if it is poorly drafted, vague, or inconsistent with the law. For example, ambiguous terms or conflicts with superannuation rules can render a BFA void. This underlines the importance of precise drafting by experienced family lawyers.
Impracticability
Even a well-prepared BFA may become unworkable. This might happen if assets no longer exist or if circumstances beyond a party’s control make compliance impossible. In these cases, the court can set the agreement aside.
Material changes in circumstances involving children
The law gives special protection to children. If circumstances change significantly after the agreement is signed, and enforcing the BFA would cause hardship to a child or their primary carer, the court may intervene. For instance, if a parent suffers a serious illness that affects their ability to care for the child, the court may override the BFA to ensure the child’s needs are met.
Attempting to defeat creditors or third parties
A BFA cannot be used to avoid debts or disadvantage others, including new partners or family members. If the agreement was created to keep assets out of creditors’ reach, or recklessly disregards the rights of third parties, it may be set aside.
Superannuation interests that cannot legally be split
Some superannuation funds cannot be divided under the Family Law Act or superannuation law. For example, withdrawal benefits under $5,000 and certain pensions or annuities paying less than $2,000 annually are unsplittable. If a BFA attempts to divide these types of interests, that part of the agreement will be invalid, and the court may need to step in.
How often are BFAs set aside?
While the law allows courts to intervene in specific situations, it is important to recognise that this does not happen often.
The onus is on the party challenging the agreement to prove that one of these strict criteria applies. Courts have consistently emphasised that mere unfairness or a "bad bargain" is not sufficient.
A challenger must show, for example, that one party suffered a special disadvantage affecting their judgment, and that the other knowingly took advantage. Put plainly, judges have emphasised that the bar for overturning a BFA is high. Successful challenges generally require clear evidence of unconscionable conduct, duress or similar wrongdoing.
Some recent case examples include:
Delrio v Jindra [2019] FCCA 1186
The Full Court considered a pre-nuptial agreement signed the day before the wedding. The husband challenged the agreement on grounds of unconscionable conduct, but the Court found no special disadvantage or evidence that he was coerced. Both parties were 36, financially independent, and had received proper legal advice. The husband had prior knowledge of the agreement, was encouraged to seek advice, and had time to review it, despite the wedding being imminent. The Court emphasised that timing alone does not invalidate a well-prepared agreement.
Saintclaire & Saintclaire [2015] FamCAFC 245
The wife attempted to overturn a pre-nuptial agreement, citing her past depression, medical issues, and personal debts as factors that made her vulnerable. The Court found that she had negotiated the agreement over several months, received independent legal advice, and that her condition had been resolved before signing. The Full Court enforced the BFA, showing that claims of vulnerability or past hardship will not invalidate a properly executed agreement unless supported by clear evidence of coercion or undue influence at the time of signing.
Graham & Squibb [2019] FamCAFC 33
The husband sought to invalidate a pre-marriage BFA prepared using a basic internet template, which omitted some technical references to the Family Law Act. He argued that these omissions rendered the agreement invalid. The Court emphasised that a valid BFA does not need to be "just, equitable or fair" in content. Despite the document’s imperfections, the parties’ intent and adherence to s 90G technicalities meant the agreement remained enforceable, and the husband’s appeal was dismissed.
Frederick & Frederick [2018] FCCA 1694 (FCCA)
The wife claimed she signed under duress (being vulnerable and not understanding due to limited English) and that the BFA inadequately provided for future changes (their autistic son’s needs). The Federal Circuit judge did not set aside the agreement. The court found the wife had not demonstrated that she would suffer any hardship if the BFA remained binding, nor proved that she misunderstood the agreement or lacked proper advice. In absence of concrete evidence of disadvantage, the judge enforced the BFA.
Partial v Full Setting Aside
In some situations, the problem can be confined to a single clause or a narrow technical issue. In these circumstances, the court may sever or correct that clause while leaving the remainder of the agreement in place. This is often the case where the defect is limited and does not undermine the parties’ overall consent to the agreement.
A common example is section 90E of the Family Law Act, which renders any spousal maintenance provision void unless it specifies the person and the amount to be paid. Courts routinely treat such clauses as void and severed (where relevant and required), while the remainder of the BFA continues to operate.
Two case examples where courts have only set aside part of a BFA include:
Ryan & Joyce [2011] FMCAfam 225
The parties clearly intended to make a binding agreement during their marriage, but the document mistakenly referred to section 90B (which applies before marriage) instead of section 90C (which applies during marriage). Rather than invalidate the whole agreement, the Court rectified the error by substituting the correct section. Where the parties’ intention is obvious and the problem is simply a technical drafting mistake, the court will generally preserve the agreement by correcting it rather than setting it aside.
Graham & Squibb (2019) FLC 93-892
This BFA contained a clause that the Full Court described as "nonsense" because it made no sense in context. Instead of declaring the entire agreement unenforceable, the Court severed the defective provision so that the balance of the BFA remained binding. Where a clause is unworkable or badly drafted, the courts generally prefer to strike out only the offending part and leave the remainder intact if that can be done sensibly.
By contrast, where the grounds for challenge go to the heart of the parties’ consent (such as fraud, material non-disclosure, duress, undue influence or unconscionable conduct), the taint usually affects the whole agreement. These are not defects that can be neatly quarantined to one clause; they undermine the integrity of the entire BFA. Once a party’s consent is compromised in this way, the whole agreement is generally tainted and cannot be saved by severing individual clauses.
In such cases, the agreement is treated as if it had never been made. The parties revert to the Court’s discretion under section 79 of the Family Law Act (or the equivalent for de facto partners) to make just and equitable property/financial orders. A full setting aside therefore returns the parties to the default statutory regime for dividing assets and liabilities.
Lastly
At Movement Legal, we have guided many clients through the process of creating BFAs. We have seen first-hand how these agreements provide long-term stability and help couples make informed decisions about their financial arrangements. Each agreement we prepare is carefully tailored to meet the strict legal requirements while reflecting the unique needs of our clients.
For couples looking to secure their financial future and avoid uncertainty and litigation, a BFA remains one of the most effective tools available under Australian law.
