A verbal contract is an agreement made between two or more parties in which the terms and conditions of the agreement are established orally rather than in writing. It’s important to remember that verbal contracts are still legally binding, even though they don’t have a document to serve as proof of the agreement. Verbal contracts may be spoken or implied, but their validity rests on how well both parties understand and agree to the terms and conditions. Each party must also be familiar with the structural elements required for a valid verbal contract, such as an offer, acceptance and consideration.