Everyday businesses create potential problems for themselves by entering into contracts.
Contracts, that are binding can be written, verbal or even implied. Imagine the difficulty in resolving the terms of a contract that is not written. Despite this, very rarely we stop to note all the details of all the business agreements we make - even though they are probably legally binding contracts.
There are set criteria to test impartially if an agreement is legally binding. The video below gives an explanation.
Also see; http://en.wikipedia.org/wiki/Australian_contract_law