Binding Financial Agreement: What Should Take Into Account

Financial agreements could be entered by any two people who are married or are preparing to marry. Financial agreements are binding - in that sense they are very difficult to overturn - but they need to fulfill the official requirements specified by section 90G of the Family Law Act 1975 (“the Act”) to achieve this status: the agreement must be written. An oral agreement won’t suffice. It is because they are quite complicated reports, and specificity is critical; both sides must receive independent legal advice from a legal practitioner. This advice must tell each of you what the agreement means for you, when it comes to your rights, and the advantages and drawbacks of the agreement. It is encouraged that you get these tips in writing; the agreement must have a clause stating you have each acquired such advice; a finalized certificate from the legal practitioner attesting to these suggestions must be coupled to the agreement; each party must sign the agreement; finally, each party must have either a copy or the original of the financial agreement.



These steps essentially avoid either party from saying they were not conscious of the implications of the agreement when they accessed into it. When is a Financial Agreement Not Binding? Although they offer comparable assurance, financial agreements are not rock solid and they can be overturned in a few very specific occasions. Section 90K of the Act lists the first few circumstances, notably where: any of the above official steps have not been satisfied; you have not disclosed, or have concealed or misrepresented, the extent of your assets and resources at the time you accessed into the agreement; it is impracticable for the agreement to be carried out, for instance; a modification has occurred associated with a child which will cause that child to go through hardship; or you accessed into the agreement by fraud, or for the purpose of defrauding another.



Your legal adviser can offer additional information on these, especially as certain standard clauses in financial agreements might be void. For instance, section 90F overturns any clause that prohibits the courts from instituting a maintenance agreement if, at the time, the other party was unable to support themselves.



A financial agreement can be overturned by contract law, because they're, basically, a contract. A full breakdown of these situations is beyond the scope of this article, but in conclusion, they arise in the act of getting one party to sign the agreement, the other party engaged in conduct that was highly unethical or fraudulent; the agreement is vague and it is unclear what it promises to do; either party forced the other person to sign the agreement; or both parties sign a new agreement terminating the financial agreement.



Many of these factors, however, should be handled by your legal practitioner when you obtain advice as to the financial agreement. Due to the difficulties involved with drafting a comparatively intricate document, it is recommended you also use your practitioner to draft, or help draft, your financial agreement. This will help ensure it is binding, and provide the mandatory safety to the two of you should the relationship break apart.