Hi Beverley.

The short answer is yes, binding financial agreements (“BFAs”) are enforceable in the Courts. There are certain legal pre-requisites which must be met for the Financial agreements to be binding and enforceable.
Firstly, for a BFA to be binding, each party must have firstly received independent legal advice from that party’s own lawyer as to the advantages and disadvantages of that party to enter in to the Agreement and whether it was in that party’s best interest to do so and to ensure that the party receiving that advice understands the implications of the proposed agreement and that the term of the agreement are fair and equitable to both parties. If the lawyers are satisfied, they will sign a 1 page certificate confirming the above.
The Family Law Act 1975 that governs financial agreements of this kind ensures that the Courts will recognise and support financial agreements.
This does not mean that a BFA cannot be challenged or that the BFA is upheld in full or part. The Court has the final determination, if challenged, to uphold or strike down the Agreement but the Court must have regard to the Agreement and look at the factors (that the Court takes in to account under s75(2) of the Family Law Act) and considerations and personal circumstances of the parties and factual circumstances/considerations/contributions at the time the Agreement was formed and at the time the Agreement is challenged. Say you sign a BFA and 10 years later you split from your partner, either party may challenge the BFA if they can successfully argue that the terms of the BFA are not fair or if a party was induced, threatened or under duress to sign the Agreement or if a full and frank disclosure of the true financial position of the parties was not made or a party sought to mislead the other party. The onus is on the challenging party to argue why the Agreement should be set aside. It is also an expensive process as the challenging party must retain an experienced lawyer to review the circumstances and advise as to whether the challenge will have a reasonable prospect of being successful.
It is much better to have a BFA signed and in place than not to have a BFA. This is because it evidences (a) an intention and an understanding and agreement at a particular point in time in the relationship and an agreement as to how property and financial resources are to be divided in the event of break up; (b) it is intended to promote harmony and avoid the cost of expensive and protracted litigation and provides a mechanism to the division of such property; and (c) it shows the assets and liabilities and contributions and what each party had and their respective values at a particular point of the relationship.
Not having a BFA exposes the party who has made greater contribution or brought more in to the relationship or who has more to lose to a potential claim in the future in the event of breakdown of the relationship.

I hope this is helpful.
AussieLegal