Your selected location:
  1. Home
  2. /
  3. Author
  4. /
  5. Ben Majoe
  6. /
  7. Binding Financial Agreements | How does Australia stack up to the United Kingdom and the United States of America?
29 Jun 2021

Ben Majoe, Special Counsel and Jordan Schweitzer, Lawyer in our Family Law team, provide an insight into Binding Financial Agreements and how they differ from our common law neighbours, the United Kingdom and the United States of America. 

BFA - Australia stack up to UK and USA

A Binding Financial Agreement, or more commonly known as a “Prenup” or “Prenuptial Agreement”, is a private written agreement that details how a couple will divide their assets and liabilities following the breakdown of their relationship. BFAs have a poor public reputation that can best be described by the following quote from case heard in 2008:

“I did not want to sign the agreement. I did not consider that it was a positive step at the beginning of the marriage.”

Despite the misgivings towards Binding Financial Agreements (BFAs), they can nonetheless be a practical step in managing the property of a relationship. According to the Australian Bureau of Statistics, despite 113,815 marriages being registered in 2019, there were also 49,116 divorces with the median length of a marriage being 12.2 years and separation occurring after only a median of 8.5 years.

Further, given that the overwhelming majority of post-separation property disputes are resolved by agreement before reaching trial (approximately 92% of all property cases), and of those cases that didn’t settle having to wait a median time of 2 years, 15 weeks to get to trial, a BFA can offer an appealing means of avoiding the courts altogether.

So, how do Australia’s BFA laws stack up to our common law neighbours, the United Kingdom and the United States of America, and do couples in these countries have the same reasons to be hesitant of entering into a BFA?

Who can enter into a BFA?

In Australia, both de facto and married couples can enter into a BFA at any time during their relationship, notwithstanding the BFA’s colloquial name of “prenuptial” suggesting otherwise.

The UK and the USA, on the other hand, have taken a similar approach towards BFAs for married and non-married couples. In both countries, a BFA is known as a “Prenuptial Agreement” and, as the name suggests, is only available to married or engaged couples. Such agreements are similar to an Australian BFA in terms of subject matter that it can cover, including division of property.

These Prenuptial Agreements are not available to non-married couples in the UK and USA, however. Instead, such couples can enter into “Cohabitation Agreements”. Despite being a different agreement, they also allow non-married couples to take matters into their own hands by stating how their property is to be divided upon separation in a manner similar to a Prenuptial Agreement or a BFA.  

Is fairness an essential requirement of a BFA?

A key aspect of a BFA that appears to be a prevalent cause of hesitation when considering a BFA is that they can be favourable only to one party.

In Australia, there is no requirement that a BFA be fair, nor that it be “just and equitable” like a traditional property settlement. The reason for this was stated succinctly in the case of Fewster & Drake:

“… subject to compliance with the statutory requirements, people are free to enter such binding financial agreements as they see fit.”

A similar approach is taken in the USA where there is also no requirement for a Prenuptial Agreement to be fair to both parties.

However, the position is the opposite in the UK. Unlike Australia and the USA, there is no Act governing Prenuptial Agreements in the UK so all authority for the rules and requirements of these agreements come from previous cases. In once such case, the UK Supreme Court affirmed the principle “the court should give effect to a nuptial agreement that is freely entered … unless in the circumstances … it would not be fair to hold the parties to their agreement.”

Is disclosure an essential requirement of a BFA?

Notwithstanding the court’s comments in Fewster & Drake (above), BFAs must be entered into freely by the parties on an informed basis. This necessarily requires the parties to openly disclose their financial circumstances.

This requirement is enshrined in legislation in Australia which states that non-disclosure of a material matter may be grounds for setting aside the BFA on the basis of fraud.

Similar requirements are in place in the USA and UK, and like in Australia a lack of disclosure can be grounds for setting a BFA aside in both jurisdictions.

A move towards increased fairness in Australia? – Undue influence and bad bargains

Despite there being no express requirement for a BFA to be fair under the Australian law, there is also no requirement in Australia for parties to sign a BFA if it only favours one side. As such, recent court decisions have begun questioning why parties may have agreed to a one-sided or “bad bargain” BFA, and whether this agreement is the result of undue influence or other unconscionable means.

The leading case on this point is Thorne v Kennedy in which Ms Thorne moved to Australia to live with Mr Kennedy with whom she had commenced a relationship. Shortly thereafter, the two became engaged and approximately one month before the wedding was to take place, Mr Kennedy had a BFA drafted. Ms Thorne ultimately signed a BFA which contained terms such that if the relationship ended, she would “have nothing. No job, no visa, no home, no place, no community.” Although this gross inequity of the BFA was not a deciding factor in itself, the court reasoned that agreements of a grossly unreasonable nature could be an indicator of undue influence. Ultimately, the BFA was set aside in this case.

BFAs are likely to remain a polarising means of distributing property between parties following the breakdown of their relationship.

Australian BFA laws attempt to thread the needle between allowing parties the freedom to reach an agreement on their own terms, while still being available to all couples regardless of their marital status. An Australian BFA is more widely available to couples than an UK Prenuptial Agreement, and the courts are taking steps towards questioning the unfairness that may go unchallenged in a USA Prenuptial Agreement.

Our team is highly skilled and experienced in advising on all aspects of Family Law. Contact us today if you need advice or representation in this area.  

*This is general information only, and does not constitute specific legal advice. Please consult one of our experienced Legal Team for specific advice relevant to your situation.

Supporting Western Australians for more than 100 years

"Always fast and thorough service. Thank you"


My circumstances at the time I made contact with HHG were dire following my argument being rejected by two no win no fee firms. Following my initial meeting with HHG's employment law team I was left feeling extremely positive by the response and concern shown by HHG in regards to their support of my argument along with their preparedness to pursue an outcome on my behalf.

I accept the fact that nobody really wins in these cases (mental health/ workplace) however the end result was what would be considered most favourable and far in excess of what would have been achieved had I not sought the advice from HHG.

I have no hesitation in recommending HHG to anyone caught up in the messy circumstances I found myself in at the time.

Great advice and five-star commitment to their client!!"


"Thank you for such great assistance with the transaction of Flying Domestics on behalf of Lorna Good. It has been such a pleasure to work with the HHG Legal Group and I look forward to working with you in the future."


"Simon Creek and his team were at all times empathic, professional and confident.  My matter needed to be addressed within a pressing time frame, and their availability at short notice and contact after hours was much appreciated.  It caused me considerable stress, but having such a thoroughly reliable and competent team to call on helped me to feel in control. Although I hope not to need their services again in future, I would be confident in doing so!"


"A good outcome is what we can expect.  A great outcome is a sign of a company which does the very best for their clients. A very big thank you to Daniel Morris for showing empathy towards my small and much needed legal action.

To HHG Legal Group, thank you for a great outcome.  I would recommend your company to anyone seeking legal services."


"Your support this morning was amazingly kind, not to mention your totally reassuring competence, knowledge and wisdom that you used on my behalf.  It was extremely reassuring to have your knowledgeable support, and I particularly appreciated your real and obvious kindness to me. It means so much at a very difficult time. I'm so grateful to you."

Family Law Client

"Janene was very professional and we established a good rapport quickly. The subject of death and wills can be quite confronting to deal with, however, Janene's approach was soft and accommodating."


"A big thank you to HHG for their professional service, continued support, and wide range of legal knowledge. Our clients have given us nothing but kind words regarding HHG Legal Group and so we have no hesitation in referring and recommending Simon Creek and HHG Legal Group for their outstanding services and legal expertise."


"Simon is a friendly and practical legal advisor. I have received great feedback from the clients I have referred to him and his team at HHG Legal Group."


"Over the last few years, I have been impressed by Simon’s legal ability, management skills, entrepreneurial spirit, personal integrity and people skills. He appears to be that rare breed of lawyer – both knowledgeable and commercial."


"Our family has been a client of HHG Legal Group over many years.  Business has included drawing up of wills for three generations and preparing of probate for my father in law. I would have no hesitation in recommending HHG Legal Group to anyone requiring such services."


"You should be congratulated for the manner in which your staff address clients and we found our dealings with your company, once again a very pleasant experience and we would like to truly thank you for your efforts."

Steve and Jane

"HHG Legal were absolutely fantastic. Extremely responsive and brought calm to our chaotic family situation through their knowledge and caring attitude. Extremely professional from our very first contact with them and they expertly guided our family though the required legal process over almost a 12 month period."


"Fantastic team! They really care about their client. Tim Colcutt is a 'go that extra mile' guy who gives his client his all. I can't recommend HHG and Tim enough."


"I had a fantastic lawyer in Matthew Lilly. He helped me out a great deal with good, sound advice in a friendly, professional manner. First class, thanks Matthew"


"Marine Plant Systems has been working with HHG Legal Group for a few years now and they continually provide first-class service. Their professional advice has been invaluable to our company."


"We were kept up to date at all times. Pricing was always updated over the time period so we remained "in budget". Personal access to someone whenever I had questions. All in all a great experience without too much fuss."


"Good service you can count on."


"HHG Legal Group has provided outstanding support as I have taken the journey of buying a business, their professionalism is beyond reproach. Their assistance throughout the Due Diligence process has been invaluable, I would fully recommend them."


"Very friendly and efficient service - what a pleasure working with Matthew."


"I highly recommend Daniel from HHG Lawyer in Mandurah. When dealing with a complicated legal property matter recently I was extremely impressed by Daniel's honesty and integrity and the legal advice I received. I am very happy with the service from HHG Legal."


Select your location:

Please select your nearest office location so we can show you the most relevant information.