We had a deal !  The Enforceability of Heads of Agreement in Family Law

by David Borg | Mar 12, 2025| Latest News

It is common for parties to draft a Heads of Agreement (HoA) after a mediation as a preliminary document outlining the agreed terms between separating parties before a formal settlement is reached. While such agreements can serve as a roadmap for resolving disputes, their enforceability remains a heavily debated issue, particularly when one party reneges on the agreement. Whether a HoA document is legally binding depends on various factors, including the intention of the parties, compliance with the Family Law Act and whether the agreement satisfies legal formalities.

Heads of Agreement are typically drafted in family law matters as a preliminary step towards formal legal documents such as Binding Financial Agreements or Consent Orders filed with the Court. They can provide clarity and reduce the likelihood of protracted disputes as they document the parties’ intentions in writing. However, while they may reflect genuine agreements, they do not automatically carry legal force.

Heads of Agreement can have many pitfalls regarding their enforceability even if they are signed and dated by the parties as they do not conform to strict guidelines that exist for documents like pre-nuptial agreements, post nuptial agreements and final consent orders. This creates an issue with their enforceability and often leads to one party being able to renege on the agreement and change their mind.

Australian Courts have generally taken a cautious approach when determining the enforceability of HoA in family law cases, with most judgments leaning towards them having a similar effect to that of a “handshake agreement.” The main issue that arises when enforcing HoA is whether or not the other party relied on the contents of the document in order to enter into a legal relationship or contract, such as a purchase of a property or entering into a contract with a supplier.

Although parties signing up to a HoA might feel legally bound by them, time and again case law about this issue suggests that a HoA is to be given little weight.  This is primarily because the Court has not yet reviewed and approved the settlement to determine whether it is just and equitable to both parties.  The HoA can certainly be taken into account, but its provisions can only be given effect if they coincide with a Court Order made under the Family Law Act.

While Heads of Agreement can be a useful tool in family law negotiations, their enforceability is not without its limitations. You should seek legal advice on any family law agreements before entering into them as, whilst they often can look like the easy way out and to bind intentions to resolve the dispute, all types agreements in family law have their advantages and disadvantages.  It is important to get proper legal advice.  Our Family Law Team has decades of experience.  4651 4800.