A verbal agreement is a type of contract or understanding between two parties that is created through spoken words, rather than being written down. This can include any kind of promise made by one party to another, whether it be in regards to a business deal, personal arrangement, or other type of agreement. The terms and conditions of the verbal agreement are typically based on mutual understanding between both parties, and may not necessarily involve legal documentation. However, if there is ever an issue with the agreement, it can become difficult to prove what was agreed upon since there is no written record.