Dear Everyone
BFA vs Consent Orders
I hope that you have had a wonderful Christmas and that 2025 will be your best year.
I have been often asked what are the differences between a financial agreement and Consent Orders in the context of Australian family law under the Family Law Act 1975 (“the Act”) and which one should I choose. The difference lies in their purpose, legal enforceability, and the process by which they are created and approved. Firstly, I wish to provide a brief overview:
1. Financial Agreement
A financial agreement is a private contract between the parties, made under Part VIIIA or Part VIIIAB of the Act (“Agreement”). It sets out how property, finances, and if required, spousal maintenance, will be handled after a relationship breakdown. Such an agreement is often referred to as a Binding Financial Agreement (“BFA”).
The Agreement must be drafted in accordance with the Act, which includes the following:
• It must be in writing;
• Both parties must obtain independent legal advice before signing;
Lawyers must provide a statement confirming this advice was given;
• There is no requirement for court approval.
• It is a private agreement which does not require filing with the court.
• It can be made before, during, or after a marriage or de facto relationship.
• It is a contract between the parties and may be set aside by the court where a party can provide evidence of fraud, unconscionable conduct, coercion, or non-compliance with legal requirements.
Advantages:
• Provides flexibility for parties to decide on financial arrangements without court oversight;
• Maintains privacy, as it is not subject to court filing or public scrutiny;
Requires the agreement of the parties;
There is no requirement for fairness;
Can be easily revoked by agreement and a new Agreement drafted to meet changing conditions; and
Can be made prior to a marriage or de facto relationship.
Disadvantages:
• Must be properly prepared and executed;
• No court verification to ensure fairness or compliance with legal principles;
• Requires the commencement of new proceedings to enforce, if required;
• Requires an additional agreement for parenting arrangements; and
Only restricted to financial matters.
2. Consent Orders
Consent Orders are formal orders approved by the Federal Circuit and Family Court of Australia (FCFCOA). They deal with property settlement, financial matters, and/or parenting arrangements in accordance with an agreement between parties.
Key Features:
• Requires an application with draft consent orders to be filed with the court. The application must disclose the financial position of the parties. The Court will review the orders to ensure that the they are just and equitable, in accordance with the Act;
If the orders include parenting matters, then the reasons why they are in the best interest of the child must be clearly set out;
• Both parties must agree to the terms of the orders; and
• As they are orders of the court, enforceability is easier.
Advantages:
• Offers the certainty of court approval and enforceability;
• Protects parties from future disputes, as the court deems the orders as just and equitable;
Must be drafted as final orders and thus cover all contingencies; and
• Being court orders by agreement, the ability to challenge or amend is difficult.
Disadvantages:
• Requires court approval, which may take time and involve additional legal costs;
• Less private, as documents are filed with the court (though not publicly accessible); and
In the event of changed circumstances more difficult to amend.
A summary of the differences is provided:
We have been assisting our clients to successfully draft Financial Agreements and Consent Orders. Where clients are wishing to have an Agreement prior to the commencement of their relationship or they want flexibility and privacy, the only option is a financial agreement. If the security of court approval is the concern, then the option of consent orders is preferable. If you have any queries or know someone requiring assistance, please do not hesitate in contacting me.
Have a wonderful day,
Jeffrey Choy0419 233 670[email protected]Please click to see more HERELiability limited by a scheme approved under Professional Standards LegislationLegal Disclaimer: This guide is for informational purposes only and does not constitute legal advice.
