The offer by X to sell his mobile phone to Y who accepted to buy it is called a verbal contract. A verbal agreement or contract is considered a valid and binding contract. Elements that make a contract binding include: Offer and acceptance, lawful purpose, lawful consideration, free consent of the parties, Capacity. There must be an offer made and a matching acceptance should be granted. The transaction must be legal and the parties should exchange something of value, in this case, money. The persons entering the contract must do so in their free will, without duress, coercion or undue influence.