The same criteria apply to verbal agreements as to written ones: offer, acceptance, consideration and intent to create legal relations (see FAQ: What makes a contract legally binding?). If a verbal agreement contains these elements, then the law may consider that it’s legally binding.
But what if one party denies that the conversation ever took place? It could be difficult to prove. Your recollection of the conversation will be important and you might need an independent witness - you’ll need to provide evidence demonstrating that you made a binding verbal agreement. With a written and signed legal contract, this situation wouldn’t arise – it’s there in black and white.
If you reach a verbal agreement with someone, it’s important to make sure you follow it up with a written and signed legal contract - the document will act as a record of your conversation.
Important to know: There are some transactions for which a written contract is required – a verbal agreement isn’t sufficient. These include the transfer of shares, the transfer of some intellectual property rights, the sale of land, and any declaration of trust over land.