What is a parol contract?

A parol contract is indeed an oral agreement that is potentially enforceable, provided it meets the necessary legal criteria for contract formation, such as mutual consent, a lawful object, and consideration. Parol contracts are not inherently invalid or unenforceable simply due to their oral nature; many oral agreements can be legally binding, depending on the circumstances and the jurisdiction's laws.

While certain types of contracts, such as those involving significant amounts of money (like real estate transactions), typically require written documentation to be enforceable, parol contracts can still hold legal weight if they are clearly articulated and proven. In contrast, options that refer to written legal documents or unwritten agreements lacking legal binding are not relevant in describing a parol contract, as they deviate from the fundamental definition of parol agreements.