Samuel Goldwyn said: “An oral contract is as good as the paper on which it is written” but this is often not the case. Indeed, the vast majority of transactions between individuals and between individuals and commercial enterprises are the execution of oral contracts. Most contracts can be written or orally and are nevertheless legally enforceable, but some agreements must be written to be binding. However, oral contracts are very difficult to enforce because there is no clear record of offer, consideration and acceptance. Nevertheless, it is important to understand what types of contracts must be written in order to be valid. For a verbal agreement to be binding, the elements of a valid contract must be present. To illustrate how the elements of a contract create binding conditions in an oral agreement, we use the example of a man who borrows $200 from his aunt to replace a flat tire. An oral contract is a kind of business contract that is described and agreed upon by oral communication, but not written. While it may be difficult to prove the terms of an oral contract in the event of an infringement, this type of contract is legally binding.
Oral contracts are often wrongly referred to as oral treaties, but an oral contract is really any contract, since all contracts are written linguistically. To win the case, the aunt must prove with evidence that her nephew lent the money with the intention of repaying it, while the nephew must prove that he did not accept. Without the documentation of the agreement, it will be a matter of er-she-said. In the end, it is a judge who decides which case is most likely of the party. Oral contracts, if properly concluded in front of witnesses, can be applied. For example, in 1984, after Getty Oil was sold to Pennzoil as part of a legally binding handshake agreement under New York law, Texaco made a higher offer and the company was sold to Texaco. (Although the case was tried in Texas, new York law was in effect.) Pennzoil filed a complaint accusing of unlawful interference with the oral contract, which was upheld by the court and paid $11.1 billion in damages, then reduced to $9.1 billion (but was enhanced by interest and penalties).  An oral contract is a contract whose terms have been agreed upon by oral notification.