What distinguishes a formal contract?

A formal contract is specifically distinguished by the requirement of being made under a seal. This means that the contract is executed with a physical seal, which historically signified it as being more binding and formal than other types of agreements. The act of sealing a document creates certain legal presumptions and can enhance its enforceability in court.

While mutual consent is a crucial element of any contract, whether formal or informal, it does not uniquely characterize formal contracts. Similarly, negotiation can take place in both formal and informal contracts, and the existence of a written document is not a definitive marker of a formal contract, as some can exist as oral agreements or based on conduct, though they may not have the same legal weight or enforceability. Therefore, the defining characteristic of a formal contract is its execution under a seal, making it distinct in legal contexts.