We consider the dynamics of a protostellar disc in a binary system where the disc is misaligned with the orbital plane of the binary, with the aim of determining the observational consequences for such systems. The disc wobbles with a period approximately equal to half the orbital period of the binary and precesses on a longer time-scale. We determine the characteristic time-scale for realignment of the disc with the orbital plane as a result of dissipation. If the dissipation is determined by a simple isotropic viscosity then we find, in line with previous studies, that the alignment time-scale is of the order of the viscous evolution time-scale. However, for typical protostellar disc parameters, if the disc tilt exceeds the opening angle of the disc, then tidally induced shearing within the disc is transonic. In general, hydrodynamic instabilities associated with the internally driven shear result in extra dissipation that is expected to drastically reduce the alignment time-scale. For large disc tilts the alignment time-scale is then comparable with the precession time-scale, while for smaller tilt angles δ, the alignment time-scale varies as (sin δ)⁻¹. We discuss the consequences of the wobbling, precession and rapid realignment for observations of protostellar jets and the implications for binary star formation mechanisms.