What is the difference between a formal contract and a informal contract?
Formal Contract: This is a contract that is in writing.
Informal Contract aka Parol Contract: This is an oral agreement.
Both types of contracts are valid if they contain all the essential elements of a “Contract” which include, Competent Parties, Offer and Acceptance, Legal Purpose and Consideration. While both are valid, parol contracts may not be enforceable in court unless there is sufficient evidence to prove an agreement existed.