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A not-so-binding financial agreement

On 8 November 2017 the High Court set aside a binding financial agreement even though the party who sought to have it set aside had received legal advice to the effect that she should not sign it.  The Court found that it was signed under undue influence and it was obtained by unconscionable conduct.  That conduct included being required to sign the agreement with a wedding impending and relatives from overseas already present to attend that wedding.  It was made clear to the spouse that were she not to sign it, the wedding would not proceed.  The fact that an agreement, in almost identical terms, was signed after the marriage did not save the agreement and make it binding.  The Court identified the following as prominent factors in whether the Court would intervene to set aside a binding agreement:

  1. Whether the agreement was offered on a basis that it was not subject to negotiation;
  2. The emotional circumstances in which the agreement was entered including any explicit or implicit threat to end a marriage or to end an engagement;
  3. Whether there was any time for careful reflection;
  4. The nature of the parties relationship;
  5. The relative financial positions of the parties; and
  6. The independent advice that was received and whether there was time to reflect on that advice.

If you have a binding financial agreement and are concerned that it may not survive a challenge you should see one of our family law specialists.


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