I have entered into verbal contracts and haven't had any real issues with them. I strongly prefer written contracts, though, because the process of hashing out a contract clarifies assumptions and misunderstandings that may not be apparent to each party until they see things put down in black and white.

The value of a contract is that it makes the terms very clear to both parties instead of relying on the other party understanding what I "obviously" meant (and vice versa).

That said, I also noticed something over the decades: I can tell the level of trust I have with a party based on how thick the contract is. If we don't trust each other, the contract will get very thick as we each try to make sure that there is no loophole the other can take advantage of.

With a high degree of trust, the contract tends to be much more brief. With a very high degree of trust, the contract can literally be a talk over coffee and a handshake.

So it all depends.

Evidence of the content and acceptance of contracts that aren’t signed writings can be hard to establish, but this very case shows that it is not impossible, especially when they aren't literally oral contracts (“verbal” just means “in words”; written contracts are verbal, but not oral, agreements.)