What type of contract is formed solely through spoken words?

The correct answer is an informal contract, which is a type of agreement that is established through spoken communication rather than written documentation. Informal contracts are often based on verbal promises and do not require a formal structure or specific format to be considered binding. In many everyday situations, this can include agreements made between friends or family members where a clear understanding exists even without any written record.

While a written contract clearly delineates the terms and provides a legal basis that is enforceable in a court of law, informal contracts often rely on the trust and intention of the parties involved. In this case, the focus is on the oral nature of the agreement, distinguishing it from written or more formal contract types.

Other options like bilateral contracts and implied contracts involve certain elements that differ from what is described. A bilateral contract typically involves two parties agreeing to reciprocal promises, while an implied contract is formed based on actions and circumstances rather than explicit spoken words. In contrast, the informal contract fits the description provided in the question, as it arises from spoken communication.