How are oral contracts defined?

Oral contracts are defined as spoken agreements made between parties, where the terms and conditions are communicated verbally rather than in written form. This type of contract can be just as binding as written contracts, as long as the essential elements of a contract—such as offer, acceptance, and consideration—are present. These agreements can often be harder to enforce because there is no physical evidence of the terms discussed, which can lead to disputes over what was actually agreed upon.

The other options represent different types of contractual agreements. Written agreements involve the terms laid out in a physical document, while implied contracts emerge from actions or conduct rather than explicitly stated terms. Formal contracts typically refer to agreements that meet specific legal requirements and often need to be in writing, such as real estate transactions or certain types of business agreements. Understanding these distinctions can clarify the nature of oral contracts as a unique form of legal arrangement based on verbal communications.