41
Colum.L.Rev. 799, 800-801 (1941).
Consideration
has both a formal and a substantive aspect. We refuse to enforce promises of gifts or
promises without consideration because of the informal manner in which they are
made. Another way to justify non-enforcement
of gift promises is that the cost of enforcing such promises exceeds the
societal benefit.
Formality
has three functions:
1. The
evidentiary function – formality provides evidence that a contract exists.
2. The cautionary
function – formality forces the parties to slow down and think about what they’re
doing.
3. The channeling
function – formality is a simple and cheap test of enforceability. It is a signal to courts and to laymen that
the contract is good and enforceable.
Forms are most useful to parties who want to make agreements that will
be enforced by a court. In other words,
if you want to make a legally binding promise either as the promisor or
promisee, it’s helpful to use a form or seal.