When a Binding Financial Agreement Fails

What It Could Mean for You

A Binding Financial Agreement, or BFA, is meant to give you certainty. It sets out in advance how your property and finances will be divided if your relationship ends, so you are not left guessing. But that certainty only holds up if the legal advice behind it was genuinely thorough. When it wasn’t, the agreement can fail, and the consequences can be serious for everyone involved.

Why the quality of advice matters so much

Why the quality of advice matters so much Under the Family Law Act 1975, a BFA is only binding if each person received independent legal advice about what the agreement means, and about its advantages and disadvantages. That advice has to go further than a quick sign-off.

The High Court case of Thorne v Kennedy showed that even when someone has had independent legal advice, a BFA can still be set aside. That case involved undue influence, where one person was pressured into signing, and unconscionable conduct, where one person took unfair advantage of the other’s vulnerable position. Having a lawyer in the room isn’t enough on its own. The advice has to be real, and it has to be properly understood.

A lawyer’s job doesn’t end at the signature

A solicitor’s role isn’t just to organise a signing. Under the Australian Solicitors Conduct Rules, lawyers must act in your best interests and provide advice competently, diligently and promptly. Queensland Law Society guidance goes further: a solicitor may need to raise risks with you even if you haven’t specifically asked about them.

That means a lawyer advising you on a BFA should check that you understand the agreement, what it means in practice, and the circumstances in which it could later be challenged. If that doesn’t happen, and the agreement fails as a result, the lawyer and their practice could face a professional negligence claim. In plain terms, that’s a legal claim that they didn’t meet the standard of care they owed you.

What if your BFA is set aside and you lose out financially?

What if your BFA is set aside and you lose out financially If a BFA is found to be unenforceable, or is set aside by the Court, you could end up with a very different property settlement to the one you expected when you signed. That’s a serious outcome, particularly if the agreement was meant to protect assets you’d built up over years.

If that loss can be traced back to inadequate legal advice, you may have grounds to look at whether your lawyer met their obligations to you. This issue was recently considered by the High Court in R Lawyers v Mr Daily [2025] HCA 41, a case about a BFA that was found to be ineffective. The decision looked at when a loss is actually suffered, how limitation periods (the time limits for bringing a claim) apply, and how damages are calculated in cases like this.

The lesson is straightforward. A defective BFA doesn’t just affect your family law matter. It can lead to a second dispute entirely, this time about the advice you were given.

Is the other party’s lawyer responsible to you too?

Not usually. A solicitor’s duty generally runs to their own client, not to the other side. Queensland Law Society guidance is clear that a lawyer’s obligations are defined by who they act for. There are limited circumstances where a duty to a third party can arise, but they depend heavily on the specific facts.

In practice, this means the lawyer acting for your former partner is not responsible for protecting your interests. Their job is to advance their own client’s position, within the bounds of their professional obligations. If you’ve suffered a loss because your own advice fell short, that is the relationship to look at first.

What this means for you?

What this means for you If you’re entering into a BFA, or you already have one, the advice behind it matters just as much as the document itself. Before you rely on a BFA for certainty, make sure:

Your lawyer has explained what the agreement means for you in plain terms, not just legal language.
You understand the circumstances in which the agreement could be challenged or set aside.
You’ve had a genuine opportunity to ask questions and raise concerns, not just a signature line to initial.

A BFA is supposed to give you peace of mind. Thorough, honest advice is what makes that possible.

Free 20-minute consultation

If you’re considering a Binding Financial Agreement, or you’re worried that one you’ve already signed wasn’t properly explained to you, we’re happy to talk it through. Book a free 20-minute consultation with our team and we’ll give you clear, honest advice about where you stand.

Call 07 2112 3947 or email team@jamesnoblelaw.com.au to book your free consultation.

About the author

Charles Noble is Director Principal at James Noble Law, a Brisbane family law firm he leads alongside his father, James Noble, one of Australia’s most senior and respected Accredited Family Law Specialists. A family law strategist and dispute resolution specialist, Charles favours mediation, collaborative law and negotiated settlements over unnecessary conflict, and is known by clients as calm under pressure, straightforward and thorough.

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