A verbal contract legally binding is an agreement made between two parties, where there has been an exchange of promises, and these promises have been accepted by both sides. This type of contract is enforceable in a court of law, and can be used as viable evidence in any legal dispute which arises from the obligations originally laid out within the verbal contract. In order for a verbal contract to become legally binding, all parties involved must fully understand their duties and responsibilities and must provide mutual agreement on what each will bring to the arrangement. Verbal contracts are distinct from written agreements, but still carry the same power as long as all terms are validly agreed upon by both parties.