Law Report How legally tight are prenuptial agreements?
Nov 18, 2025
Jackie Campbell, a family law partner at Forte Family Lawyers, and Miranda Kay, an Associate Professor at UTS, dive into the intricacies of prenuptial agreements. They discuss the recent High Court decision that showcases how poorly drafted prenups can be invalidated. Power imbalances in negotiations often leave the less wealthy party at a disadvantage. The guests explore when prenups are beneficial, particularly for second marriages, and highlight the importance of protecting parental roles to maintain harmony. They also touch on the legal repercussions for lawyers involved in such agreements.
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Prenup Failure: The Daly Story
- Mr and Mrs Daly signed a binding financial agreement in 2005 that made no reference to children and had drafting errors.
- The agreement failed after separation when Mrs Daly successfully sought to set it aside for hardship and uncertainty.
Liability Often Arises Later
- The High Court ruled liability for negligent drafting can arise when separation or a claim occurs, not only when the agreement was signed.
- However, recovering full financial loss from a leaky agreement requires proving hypothetical alternative agreements and acceptance, a high evidentiary bar.
Prove A Realistic Counterfactual
- To recover lost funds, a litigant must prove a robust counterfactual agreement and that the other party would have accepted it.
- Those requirements make large damages claims for drafting errors unlikely in practice.