An oral contract is an agreement between two or more parties which is not written down, but rather spoken verbally. A good oral contract should have all the same components of a written contract such as offer and acceptance, consideration, purpose, and parties that are legally capable of entering the contract. Therefore, an oral contract is binding in a court of law even though it has not been put on paper or signed. Although oral contracts can be effective, it’s important to be mindful of potential difficulties associated with them. In particular, there may be disputes over interpretation or proof of the existence of the agreement. For this reason, it’s wise to get oral contracts in writing whenever possible.