20 April 2024

Mastering the Framework: Alex and Jordan navigate the essentials of Business Contracts

Sajen Legal


Established in 1997, Sajen legal specialises in defending & protecting business owners and their property.
Contracts are the lifeblood of the business world, binding agreements that govern relationships and transactions.
Australia Corporate/Commercial Law
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In the bustling world of entrepreneurship, the story of Alex, a seasoned builder in his late 50s, and Jordan, a tech-savvy dynamo in her mid-30s, continues as they delve into the crucial realm of contracts. Their construction tech venture in Southeast Queensland, poised for innovation, now faces the intricate dance of drafting and negotiating contracts—a cornerstone of business success.

The Purpose and Importance of Contracts

Contracts are the lifeblood of the business world, acting as the binding agreements that govern relationships and transactions. For Alex and Jordan, understanding a contract's purpose is paramount; these documents not only formalise their business dealings but also serve as a defence mechanism against potential disputes and misunderstandings. A well-crafted contract provides clarity and certainty, outlining the rights, responsibilities, and expectations of all parties involved.

The Fundamental Requirements of a Contract

Contracts must encompass certain key elements to be legally binding and effective:

Offer and Acceptance

The contract process begins with one party making an offer and the other accepting it, forming the basis of a mutual agreement. For example, a software company might offer to provide a client with a custom software solution for a specified price. The client's acceptance of this offer, either through a written agreement or an email confirmation, legally binds both parties to the contract.


Consideration involves the exchange of value between parties in a contract. A typical scenario is a freelance graphic designer agreeing to create a logo for a business. The designer provides the creative service, and in return, the business pays a fee. This mutual exchange, service for money, represents the consideration that validates the contract

Intention to Create Legal Relations

For a contract to be enforceable, both parties must intend to enter into a legally binding agreement. This intention is usually clear in commercial contracts, such as a lease agreement between a landlord and a tenant, where both parties understand and agree that the document will be legally enforceable, dictating the terms of the tenancy.


Parties must have the legal capacity to enter a contract, meaning they are of a certain age and mental capability to understand the contract's terms. For example, a contract with a minor or someone lacking mental capacity due to illness may be considered void or voidable because they lack the capacity to understand the agreement's implications.

Legality of Purpose

A contract must be for a lawful purpose and not for illegal activities. For instance, an agreement to hire someone for a legitimate job is enforceable, whereas a contract for hiring someone to conduct illegal activities, such as hacking into secure systems, is void and unenforceable because it violates the law and public policy.

Alex and Jordan's Situation

Alex and Jordan's journey is punctuated by various contract negotiations, each with its unique challenges and learning curves. They require client agreements for their innovative construction technologies, supplier contracts for their hardware and software needs, and partnership deals that promise to propel their business forward. These agreements are more than just paperwork; they are strategic tools that can make or break their venture.

Drafting Contracts

Drafting contracts is an art and science that Alex and Jordan approach with meticulous care. They learn that clear, concise, and comprehensive contracts are crucial. These documents must accurately reflect the deal's terms, anticipating potential issues and outlining solutions. They focus on creating contracts that are fair, balanced, and transparent, ensuring all parties are on the same page. More importantly, they seek specialist legal advice to have their contracts drafted in a manner that suits their purpose and provides the commercial outcome they need.

Negotiating Contracts

Negotiation is a critical skill in the contracting process. Alex, with his decades of industry experience, and Jordan, with her strategic mindset, complement each other's negotiating styles. They understand the importance of preparation, knowing their objectives, and understanding the other party's needs. Their negotiations are not just about winning terms but about building lasting business relationships that foster mutual success.


As Alex and Jordan navigate the complexities of business contracts, their story offers valuable insights into the importance of understanding, drafting, and negotiating contracts. Their experiences underscore the role of contracts in safeguarding business interests, facilitating growth, and building strong professional relationships. For entrepreneurs embarking on their business journeys, mastering the framework of contracts is not just a legal necessity but a strategic advantage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

20 April 2024

Mastering the Framework: Alex and Jordan navigate the essentials of Business Contracts

Australia Corporate/Commercial Law


Established in 1997, Sajen legal specialises in defending & protecting business owners and their property.
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