When two parties decide to end their relationship, they may choose to enter into a binding financial agreement (BFA) to settle their financial affairs. A BFA is a legal document that outlines how the parties` property and assets will be divided, spousal maintenance arrangements, and any other financial matters that need to be resolved. However, what happens if the parties decide to enter into a BFA after their relationship has ended, or if their BFA is not signed within the required time frame?
In Australia, parties must enter into a BFA before or during their relationship to be binding. If a BFA is signed after the end of a relationship or beyond the required time frame, it is considered an “out of time” agreement. An out of time BFA can still be drafted, but the parties will need to demonstrate to the court that it is just and equitable in the circumstances.
The court will consider several factors when deciding if an out of time BFA is just and equitable. The first consideration is whether there has been any fraud, duress, or undue influence in the formation of the agreement. If the court finds that one party exerted undue pressure on the other to sign the BFA or that one party withheld information, the BFA may be deemed invalid.
The court will also consider the parties` respective financial positions at the time of signing the BFA. If one party has experienced a significant change in their financial circumstances since the BFA was signed, the court may consider revising the agreement to reflect these changes.
Another factor that the court will weigh is the parties` understanding of the terms of the BFA. If one party did not fully understand the terms of the agreement or was not provided with legal advice, the court may determine that the BFA is not enforceable.
Finally, the court will consider any other relevant circumstances when deciding if an out of time BFA is just and equitable. This can include the length of time since the relationship ended, whether there have been any significant changes in either party`s circumstances, and any other factors that the court deems relevant.
In conclusion, parties who wish to enter into a BFA should do so before or during their relationship to ensure that it is binding. If a BFA is signed out of time, it may still be enforceable, but the parties will need to demonstrate to the court that it is just and equitable in the circumstances. Ensuring that all parties fully understand the terms of the agreement and seeking legal advice can help to prevent any challenges to its enforceability down the road.