A verbal contract is an agreement made through spoken words rather than written documentation. It occurs when two or more parties discuss terms and conditions and come to a mutual understanding. While verbal contracts can be legally binding, proving their existence and specific terms can be challenging in case of disputes. In many jurisdictions, certain types of agreements, such as those involving real estate or significant financial transactions, must be in writing to be enforceable. However, everyday agreements, like a promise to pay for a service, can often be considered valid verbal contracts if they meet the necessary legal criteria.