What is Oral Contract?

Legal Definition
An oral contract is a contract, the terms of which have been agreed by spoken communication. This is in contrast to a written contract, where the contract is a written document. There may be written, or other physical evidence, of an oral contract – for example where the parties write down what they have agreed – but the contract itself is not a written one.

In general, oral contracts are just as valid as written ones, but some jurisdictions either require a contract to be in writing in certain circumstances (for example where real property is being conveyed), or that a contract be evidenced in writing (although the contract itself may be oral). An example of the latter is the requirement that a contract of guarantee be evidenced in writing, which is found in the Statute of Frauds.

Similarly, the limitation period prescribed for an action may be shorter for an oral contract than it is for a written one.

The term verbal contract is sometimes incorrectly used as a synonym for oral contract. However, a verbal contract is one that is agreed to using words, either written or spoken, as opposed to an implied contract.
-- Wikipedia
Legal Definition
One which is partly in writing and partly depends on spoken words, or none of which is in writing; one which, in so far as it has been reduced to writing, is incomplete or expresses only a part of what is intended, but is completed by spoken words ; or one which, originally written, has afterwanis been changed orally. See Snow v. Nelson (C. C.) 113 Fed. 353; Railway Passenger, etc., Ass'n v. Loomis, 142 111. 560, 32 N. E. 424.
-- Black's Law Dictionary