Reviewing A Binding Financial Agreement is Essential!
When a client calls us about reviewing a Binding Financial Agreement (BFA) an extensive review of a client’s circumstances is essential prior to entering into a BFA as there are numerous grounds upon which the BFA may be set aside years later by a court notwithstanding a client’s agreement to the terms.
Protecting a client can be very difficult when faced with certain circumstances, which in turn years later, could result in the agreement being set aside – ultimately a large waste of money by the client.
Circumstances that may result in the document being set aside include:
- The need for adequate disclosure of all relevant matters and assets;
- All of a party’s interest in any asset – actual or contingent – must be disclosed;
- A party’s intentional deceit or fraud in hiding assets or not disclosing them;
- Unfair/ Biased terms in the BFA. The agreement reached has to be basically fair or at least arguable, however, if it is totally unfair the Court may assume the person is not thinking correctly and may set it aside.
- Your intended partner must be given plenty of time to come to an agreement without rushing into a BFA (ie a week before the marriage is too short).
- The possible imbalance of one of the parties, which can create issues in negotiating the terms of the BFA.
- Pressure from the other party in signing the document.
- The Agreement must be entered into voluntarily and freely.
Adequate time to consult with an independent solicitor assists to avert some of these issues and thus allow proper analysis.