What is a 'legally binding verbal contract'?

Verbal agreements and contracts are valid as long as they are made in good faith. There are certain elements required to create a legally binding contract and those include:

  • Mutual consent and understanding
  • Offer and acceptance
  • Mutual consideration
  • Mutual performance of duties

However, verbal contracts present a problem when it comes to enforcement if one of the parties has breached the terms of the agreement. With no written proof of the terms the plaintiff faces difficulty in providing evidence that will satisfy the court. Also, there is the problem of one or both parties not being honest. The party that has breached the contract is unlikely to give honest testimony in court. Those obstacles can make a decision in favor of the plaintiff unlikely.
The real deal is that a verbal contract already is legally binding. Assuming that both parties later on tell the truth about what was said.

I suppose if you wanted to add a more solidly "legally binding" aspect to it, you'd have that verbal contract witnessed by some impeccably impartial third party. Unrelated to either party by blood, marriage, friendship or financial ties, and of a profession known for integrity, such as a priest or judge.

But frankly, for all the trouble that would be, one might just as well type the agreement, and both sign in front of a notary public, with each walking away with an original.