Setting aside a BFA — the real grounds and how we mitigate them

The grounds — five categories

A court can set aside a BFA only on the grounds set out in the Family Law Act 1975 (Cth) (and the Family Court Act 1997 (WA) for WA de facto matters). These are:

1. Fraud or non-disclosure — one party hid assets or lied about something material
2. Duress, undue influence or unconscionable conduct — one party was pressured, rushed, or didn't have a real chance to understand what they were signing
3. Material change relating to a child of the relationship — an unforeseeable change involving a child of the relationship makes the agreement cause hardship to the primary carer
4. Impracticability — circumstances have changed so much that the agreement can't be carried out as written (a very high threshold)
5. Improper execution — the formal legal requirements weren't met, particularly around independent legal advice

A BFA cannot be set aside just because one party later thinks the terms are unfair. Unfair is allowed. Improper isn't.

We'll walk through each ground, and how we mitigate each one in the drafting and process.

1. Fraud and non-disclosure

The ground

If one party failed to disclose a material asset or liability — or actively lied about something material — the other party can apply to set aside the BFA on the grounds of fraud or non-disclosure.

Both parties are required to make full and frank disclosure of all assets, liabilities and financial resources before signing. Hidden assets, undisclosed income streams, deliberately concealed business interests, and overseas accounts that didn't make it into the schedules are all common grounds for set-aside applications.

How small a non-disclosure matters

Case law shows that even relatively small undisclosed amounts — as little as $20,000–$30,000 — have been held sufficient to set aside a BFA. The risk is not proportionate to the size of the asset.

A party who hides a $50,000 bank account on a $5 million asset pool isn't safe just because it's a small percentage. The disclosure obligation is total. Material is judged in context.

What counts as "material"

Anything that, if known, might have affected the other party's decision to sign the agreement or the terms they would have accepted. This includes:

• Bank accounts in sole names
• Crypto holdings in self-custody wallets
• Anticipated inheritances
• Loans owed to or by family members
• Workers' compensation claims
• Interests in trusts or companies (even dormant ones)
• Overseas property and accounts

How we mitigate this

Two ways. First, the BFA schedules at the back of the agreement are extensive — we ask both parties to disclose comprehensively, including financial resources that aren't being divided. Second, the BFA includes a due diligence clause recording that each party was given the opportunity to exchange full financial disclosure documents (bank statements, super statements, valuations, mortgage statements) before signing. If they choose not to take up the opportunity, that's documented — meaning a later claim of "I didn't know about that" runs into the recorded acknowledgment that they had the chance to look.

2. Duress, undue influence and unconscionable conduct

The ground

If one party was pressured, threatened, manipulated, or otherwise didn't enter the agreement freely, a court can set the BFA aside. The legal categories overlap but each captures something different:

• Duress — threats, ultimatums, coercion. "Sign or I leave you with nothing."
• Undue influence — exploiting a position of trust or vulnerability to influence the other party's decision. Common in relationships where there's a significant power imbalance.
• Unconscionable conduct — taking advantage of a known disability, illness, language barrier, or other vulnerability that makes the other party unable to deal with the agreement on equal terms.

These grounds protect parties whose consent wasn't really consent.

Common factual patterns

What gets BFAs set aside on these grounds in practice:

• Imminent-wedding pressure. A BFA presented for signing days before the wedding, where the receiving party feared cancelling the wedding more than signing the agreement. Courts have set BFAs aside where the timing left no real choice.
• Withholding visas or migration support as pressure to sign. The applicant's immigration status was leveraged.
• Conditional inheritances or gifts of significant size, where signing was the only way to receive the inheritance or family gift.
• Significant medical or capacity issues of the disadvantaged party that the other party exploited.
• No genuine independent advice despite the certificate being signed — for example, where the advising lawyer was nominally independent but actually closely aligned with the other party's interests.

Small incentives don't usually meet the threshold

A small financial incentive — a modest payout conditional on signing, a routine commercial inducement — is unlikely on its own to constitute duress. The pressure has to be significant.

How we mitigate this

The drafting and process protections:

• No rushed signings. We don't take BFA engagements where the timeline is so tight that signing has to happen under pressure. For pre-marriage BFAs, we recommend the agreement be fully signed at least one month before the wedding, with the drafting process started at least 10–12 weeks before that.
• Each lawyer is satisfied of voluntariness. Part of the advising lawyer's job is to be confident the client is signing freely. If the lawyer has any doubt, they should raise it before signing.
• Clear written advice letters. Each party's advice is documented in a letter explaining what they're giving up. This documents understanding and informed consent.
• Translation and interpreter requirements. Where language is an issue, we use NAATI-accredited interpreters and translated documents. The advising lawyer must be satisfied the client genuinely understood the agreement.

3. Hardship caused by children of the relationship

The ground

This is the most common live risk in modern BFAs. A court can set aside a BFA if a party would suffer hardship as a direct result of caring for a child of the relationship.

The key phrase is "as a direct result". The hardship must be causally linked to the children, not just incidental to the separation. General hardship from the separation itself isn't sufficient. Examples of hardship that has met the threshold:

• A party who cannot work or can only work reduced hours because they are the primary caregiver of a young child
• A child with significant health needs requiring a parent to reduce work or incur substantial extra costs
• A dramatic shift in caregiving arrangements such that one party goes from no responsibilities to full-time care

When the risk is highest

The ground is more likely to apply when:

• the child is young or has complex needs (more dependency, longer-running impact)
• the outcome under the BFA leaves the primary carer significantly worse off than a court-ordered settlement would
• there's a large asset disparity in the BFA
• the causal link is genuine and demonstrable

The larger the asset disparity and the younger or more dependent the children, the greater the risk.

How long does the risk run?

The ground applies until the youngest child of the relationship turns 18. As children grow older and more independent, it becomes harder to establish the required causal link between the child and any hardship.

The court assesses hardship at the time the agreement is being challenged, not at the time it was signed. So an agreement that looked reasonable when signed can still be set aside later if a child-related hardship develops.

How we mitigate this

The mitigation here is partly factual and partly structural. The factual mitigation: we encourage parties to be realistic about how the BFA will look if a child arrives or if a child has unforeseen needs. The structural mitigation:

• Periodic review. Recommend revisiting the BFA when a child arrives or when there's a material change in a child's circumstances. A formal review clause can be built in, though it's only useful if you'll actually do the review.
• Adjusting cash payments scaled to children or relationship duration. Some BFAs include a clause that the asset division is adjusted upward to the disadvantaged party for each child of the relationship, or for each year of the relationship, providing some baseline against later hardship claims.
• Termination or review triggers. Some BFAs include clauses that automatically terminate or trigger review on the arrival of a child, forcing a fresh look.

None of these mitigations completely eliminate the children-hardship risk. They reduce it. The honest position is that this is the ground we can least insulate against by careful drafting alone — because the future is genuinely unpredictable when children are involved.

4. Impracticability

The ground

A BFA can be set aside if, due to a completely unforeseen event, it has become impossible to carry out the agreement as written.

This is a high threshold. Routine economic events don't qualify:

• A business downturn — no
• A property price fall — no
• A change in interest rates — no
• A redundancy — no, usually

What might qualify:

• A truly extraordinary event entirely outside anyone's contemplation at the time of signing — a natural disaster wiping out a key asset, regulatory changes making a structural arrangement illegal, an asset being seized by foreign authorities, an unforeseeable terminal illness materially changing the calculus

The bar is set deliberately high. The point of a BFA is to provide certainty against ordinary life events. If the only thing that can disrupt it is something genuinely extraordinary, the bar is doing its job.

How we mitigate this

Mostly by drafting clear, executable terms that can survive ordinary economic variability. Where an asset has unusual volatility (crypto, certain businesses, foreign assets), the BFA can include provisions about how the parties will treat material movements without invalidating the whole agreement.

We can't draft around truly unforeseeable events. Nobody can. But the threshold for invoking this ground is so high that for the vast majority of BFAs, this isn't where the risk lies.

5. Improper execution — the procedural failures

The ground

The BFA must be executed in accordance with the formal requirements of the Family Law Act. The most critical of these is independent legal advice on both sides, with a properly executed certificate of advice from each party's lawyer.

Most BFAs that get set aside fail on procedure, not content. This is the area where careful drafting and process matter most.

Procedural failures the courts have set BFAs aside on:

• Certificate of advice missing or defective
• Advice given by a non-independent lawyer (e.g. same firm acting for both parties)
• Advice not in writing or not properly recorded
• Advice rushed or inadequate (lawyer didn't actually walk through the agreement)
• Advice given after signing rather than before
• Translation not provided where required (party with language barriers signing without proper interpretation)
• Certificates signed but the underlying advice wasn't actually given
• Wrong section of the legislation cited in the agreement (causing the BFA to fail to engage the binding-financial-agreement framework at all)

How we mitigate this

This is the area where the most mitigation is possible. Our procedural protections:

• Genuine independent advice for both parties. Each party's lawyer is at a different firm. Lawcaptain acts for one party only; your partner engages a separate firm of their own.
• Written advice letters. Each party's advice is documented in a written letter setting out what was discussed, what the party is giving up, and the risks they should be aware of.
• Properly executed certificates. The certificate of advice is signed by the advising lawyer at the time of advice, before the BFA is signed, and attached as an annexure.
• Sequential execution. Both parties sign with their own lawyers; the originals are exchanged. The process is documented at each step.
• Correct legislative drafting. Our BFAs cite the correct section depending on jurisdiction and relationship status — section 90B (pre-marriage, Cth), 90C (during marriage, Cth), 90D (post-separation, Cth), 90UB/C/D (de facto, non-WA, Cth), 205ZN/ZO/ZP (WA de facto). Getting the section wrong is one of the most common drafting errors in DIY BFAs.
• Translation and interpreter protocols. Where required, accredited interpreters are used and translated documents are annexed.

This is the area where engaging a competent lawyer is most clearly worth the cost. DIY BFAs often look fine on the page but fail at procedure.

What happens if a BFA is set aside

If a court sets aside a BFA, the legal effect is that the agreement is treated as if it never existed. The property pool is then divided according to general family law principles — contributions (financial, non-financial, homemaking, parenting), future needs, and the just-and-equitable standard.

This is, in most cases, a worse outcome than the BFA produced — because the BFA was drafted to do something the general principles wouldn't (e.g. quarantine assets that would otherwise be in the pool). Set-aside means falling back to the default rules.

The cost of set-aside proceedings is also significant. It's not a quick administrative correction; it's litigation. Defending or pursuing a set-aside application typically costs tens of thousands of dollars in legal fees per party.

This is why getting the BFA right at the front end matters far more than litigating it at the back end.

What can't get a BFA set aside

To close out the picture, here are the things that cannot get a BFA set aside:

• Unfair terms. The deal can be lopsided. That's allowed.
• Buyer's remorse. One party regretting the agreement isn't a ground.
• Economic change. Property prices fall, businesses succeed or fail, careers progress — these are ordinary risks, not grounds for set-aside.
• One party getting richer. If post-BFA wealth growth was meant to be quarantined, that quarantine is what the BFA bought.
• A new relationship. Subsequent relationships for either party don't affect a previously-executed BFA.

A BFA is not a "fairness check at any later time" — it's a contract with limited circumstances under which a court can intervene. That's the whole point of choosing a BFA over consent orders.

The honest summary

A properly drafted, properly executed BFA is difficult to set aside.

The grounds are limited and most require something to have gone wrong with procedure or disclosure. We get the procedure right. The disclosure is on the parties — and we structure the schedules and the due diligence clause to make it as protective as possible.

The remaining risks — particularly the children-hardship ground — can be mitigated but not eliminated. That's the honest position. Anyone telling you a BFA is bulletproof either doesn't know what they're talking about, or is overselling.

For the vast majority of couples with reasonable disclosure, genuine consent, and proper independent advice on both sides, a well-drafted BFA does what it's designed to do — provides a clean, private, enforceable settlement that holds up over time.

Common questions

Has Lawcaptain ever had a BFA set aside?

We — and our parent firm MKI Legal — have prepared hundreds of BFAs across many years of practice. The procedural protections we use are designed to prevent the most common grounds for set-aside, and we don't take on engagements where the timeline or circumstances make a fragile agreement likely. If we don't think the BFA will hold, we'll tell you up front and decline rather than draft something at risk.

Can a court refuse to enforce a BFA without formally setting it aside?

In limited circumstances, yes — a court can decline to enforce a specific clause if it's contrary to public policy or otherwise unenforceable, while leaving the rest of the agreement in place. This is much rarer than full set-aside.

What if my partner threatens to challenge the BFA?

A threat isn't a successful application. The threshold to actually set aside a BFA is high, and the cost of running a set-aside application is significant. We can advise on the substantive strength of any threatened challenge.

Can we agree to terminate a BFA later if we both want to?

Yes, but only through a formal termination agreement, which requires independent legal advice on both sides — the same process protection as the original BFA. A text-message or email agreement to "tear up" a BFA is not effective.

Can a BFA be partially set aside while leaving the rest in place?

Generally no — set-aside is typically all-or-nothing. If a court sets aside the BFA, the whole agreement falls. Drafting a BFA in modular pieces doesn't insulate individual clauses from the application of the set-aside grounds.

What about the spousal maintenance government-benefits exception — is that "setting aside"?

Not quite. The government-benefits exception is a statutory carve-out that allows a spousal maintenance claim to be made despite a set-off clause, in specific circumstances. The rest of the BFA continues to operate; just the maintenance set-off is bypassed for that party. See Spousal maintenance explained for the detail.

Why this matters for your decision

If you're weighing up a BFA against consent orders, the set-aside picture changes the calculation:

• Consent orders carry court approval at the moment of sealing. The fairness check is done up-front by the court. Set-aside applications post-sealing are rare and require very specific grounds (fraud, non-disclosure, duress). Day-to-day, sealed consent orders are extremely difficult to disturb.
• BFAs have no court approval. Their robustness rests on the quality of the drafting and the proper execution of the procedure. Done well, BFAs are highly enforceable — but the protection comes from procedure, not from a sealed court order.

For most separated couples, consent orders are the simpler, lower-risk path. The BFA is the right answer when you need its specific features — privacy, lopsided agreements the court wouldn't approve, spousal maintenance lock-out. The set-aside risk on a properly drafted BFA is low, but it's not zero, and the choice between the two instruments should account for that.

This is one of the conversations we have during the initial consultation. Talk to us.