What happens if a Financial Agreement is challenged?

 What happens if a Financial Agreement is challenged?

Are you unsure whether your Financial Agreement is binding?

A Financial Agreement can be deemed non-binding or held invalid if a party challenges the agreement in Court. The person enforcing the agreement must prove that the agreement is indeed binding and enforceable.

What is important to note is that a Financial Agreement is not required to be fair.  For a Financial Agreement to be binding, it must meet the following requirements:

1. That it be signed by all parties;
2. That before signing the agreement, each spouse was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages at the time the advice was provided to that party making that agreement.
3. Either before or after signing the agreement, each party was provided with a signed statement from their legal practitioner stating that the advice (as referred to above) was provided to that party. A copy of the statement must be provided to the other party.
4. That the agreement has not been terminated or set aside by a Court.

The Court can set aside a Financial Agreement on the following bases:

1. If a party entered into the Agreement to defraud their spouse or other creditors;
2. If the Agreement is void, voidable or unenforceable. This usually occurs if the Agreement has terms that do not make sense or cannot be enforced;
3. Since the making of the Agreement, circumstances make it impractical for the Agreement or part of the Agreement to be carried out;
4. There has been a material change in circumstances such as the care of a child and as a result, one of the parties to the Agreement will suffer hardship;
5. Unconscionable conduct where a party is found to have acted in such a way to have knowingly caused a disadvantage to the other party or acted unfairly or particularly harsh;
6. Whether there is a payment flag or an unsplittable interest in relation to superannuation.

Financial Agreements can be fraught with danger if they are not prepared properly and if both parties do not receive appropriate legal advice before entering into them.

The following is a checklist to consider when assessing whether you could set aside your Financial Agreement:

1. Did you receive independent legal advice before signing the Agreement?
2. Did you receive financial disclosure of all of your partner’s assets when you entered into the Agreement?
3. Did you feel forced and induced to enter into the Agreement? For example, were any threats made to you if you did not sign the Agreement?
4. Did you get the opportunity to read and understand the Agreement before you signed it and was it in your native language?
5. Have your circumstances changed significantly since you entered into the Agreement, for example, have you subsequently had a child with your partner?

Contact Lewis Family Lawyers today and we can assist you in determining whether your Financial Agreement is binding and enforceable.