Consent Order vs Binding Financial Agreements

Consent orders and binding financial agreements (BFAs) are essential tools in Australian family law for managing financial arrangements post-relationship breakdown. Consent orders are court-approved agreements that become legally binding once deemed fair and reasonable by the court. BFAs are private agreements between parties, covering financial matters at any stage of a relationship, requiring independent legal advice but no court approval. Both methods formalise financial arrangements but differ in their process and legal oversight.

Understanding Consent Orders and Binding Financial Agreements in Australian Family Law

Consent orders and binding financial agreements (BFAs) are two different mechanisms used in Australian family law to manage financial arrangements between parties after a relationship breakdown. Here are the key differences:

Nature and Approval

• Consent Orders: These are written agreements that are submitted to and approved by a court. They become legally binding and enforceable once the court has reviewed and agreed to the terms, ensuring they are fair and reasonable.

• Binding Financial Agreements: These are private agreements made between the parties without needing court approval. They cover financial matters and can be made before, during, or after a relationship.

Legal Requirements

• Consent Orders: Must be filed with the court and meet the court’s standards of fairness. The court ensures that the agreement is just and equitable before granting the order.

• Binding Financial Agreements: Must comply with specific formal requirements, including both parties receiving independent legal advice. The agreement must be in writing and signed by both parties, with a statement from each lawyer confirming the advice given.

Enforceability

• Consent Orders: Once approved by the court, they are legally enforceable, and the court can enforce compliance if one party fails to adhere to the terms.

• Binding Financial Agreements: They are legally enforceable as long as they comply with the required legal formalities. However, they can be set aside by the court under certain circumstances, such as if there is evidence of fraud, duress, or significant changes in circumstances.

Scope

• Consent Orders: Typically address financial settlements and arrangements for children post-separation.

• Binding Financial Agreements: Can address financial matters at any stage of a relationship, including prenuptial agreements (before marriage), agreements during the relationship, or post-separation agreements.

Both consent orders and BFAs provide a way for parties to formalise their financial arrangements and avoid court disputes, but they differ in their process and legal oversight in the context of Australian family law.