A simple contract is defined as an agreement rendered in unsealed notes which are not a matter of record, making it more binding than a verbal promise. Such contracts may be disputed and are generally not used for serious business ventures or for agreements of some scale and importance.
Simple contracts are documents signed by all parties participating in an agreement but not witnessed by a notary or otherwise filed for official record. This means that such documents are not a matter of record and have less legal standing than notarized documentation or other official paperwork typical to such agreements.
Simple contracts supersede verbal agreements but are not themselves always binding. If witnessed and notarized, they cease to be simple contracts and take on greater legal standing in the eyes of the government and of the courts. They are sufficient for informal deals between associates and friends with established relationships and mutual trust.
Simple contracts can also be constituted by oral evidence, or recorded speech with clearly identifiable participants. This form of agreement is generally more binding as it makes it clear that individuals discussed and agreed to a given condition, set of conditions or other form of business arrangement through consensus with one another.