Can a legally binding agreement ever be overturned or cancelled?
Even if the above legal criteria have been met and the agreement is considered to be legally binding, it is possible for the validity of the agreement to be challenged by either spouse or partner which could result in the agreement being set aside.
The Federal Circuit and Family Court of Australia does have the power to set the agreement aside in certain circumstances, including:
Non-Disclosure
For a prenuptial agreement to be valid, both parties to the agreement must disclose their financial position in full. This includes all assets and financial resources.
If an agreement is made without full and frank disclosure the agreement may be seen as having been obtained fraudulently.
If a party to the agreement has tried to hide assets, perhaps because they have significantly more than the other person, this can give the other party a good reason to challenge the prenuptial agreement if separation or divorce does occur.
Material Change
This means that if there has been a significant change to the circumstances of the relationship that the agreement has not taken into consideration, the agreement could be set aside.
One of the most common types of material change is children. If a couple has children, and the prenup does not make any provisions for children, there is a likelihood that the prenuptial agreement will be set aside.
The Agreement is not just and equitable
While the prenuptial agreement has been developed to allow decisions about how assets and property will be divided upon separation or divorce without having to deal with the court system, the agreement must still be fair and equitable.
While provisions may have been made that were thought of as fair at the time the agreement was made, they may not be considered as being fair and just when it comes time to the agreement being effective.
This can be affected by changes such as children, employment, and the health of one of the parties to the agreement.
Duress and Unconscionable conduct
A person cannot be forced into signing a prenup, because down the track, this could result in the validity of the prenuptial agreement being challenged.
Threatening to cancel the wedding unless the prenuptial agreement is signed is an example of duress and unconscionable conduct.
In the case of Thorne vs Kennedy, pressure was placed on the wife to sign a prenuptial agreement by the husband only days before their wedding. This case resulted in the agreement as being found as voidable due to the unconscionable conduct of the husband who had disadvantaged his wife by bringing her to Australia on the promise of marrying her but refusing to marry her unless she signed the agreement. You can learn more about this case here.