My clients "Greg and Denise" learned this lesson the hard way. Excited to start a beer brewery with Greg's college friend, they discussed contributions and responsibilities for six months and sealed the deal with a handshake.
Over the following months, Greg and Denise invested $8,000 in startup costs. But when they tried to reach the friend, he became elusive. When confronted, he conveniently "forgot" the agreement.
If only Greg and Denise had known his lack of seriousness, they would not have invested so much money without making a plan B. Their excitement to start a brewery with the friend turned into a bitter experience when the handshake deal fell apart (and so did the friendship).
Contracts exist not because everyone keeps their word but for the times they don't.
A verbal contract, while technically enforceable, can lead to exponentially higher enforcement costs compared to a written one. The clarity of the written word will always carry more weight than "he-said/she-said" and finger-pointing.