An oral contract is an agreement made verbally between two or more parties. These contracts can be legally binding, provided they meet certain criteria, such as mutual consent and a clear understanding of the terms. However, proving the existence and specifics of an oral contract can be challenging, as there is no written record. While oral contracts are common in everyday situations, like agreements between friends or family, they can lead to disputes if one party does not fulfill their obligations. It is often advisable to document important agreements in writing to avoid misunderstandings and provide clear evidence of the terms.