Why Are Contracts Important In Society?

Questions:

1. Why are contracts important in society?  What would happen if we didn’t have contracts?
2. One of the concepts in contract law is that if parties sign a bad contract, it is sometimes more efficient to break it and pay the damages than satisfy it.  Do you believe that parties to a contract have a moral obligation to satisfy it?
3. Name the elements of forming a contract, define them, and then apply them in context to a contract you have entered into some time in your life (nothing personal or that you feel uncomfortable sharing—a normal consumer contract is fine).

Hypothetical:

Grandma Meredith was beloved by her family for many years.  Though she had many grandchildren, her particular favorite was a handsome 10-year-old named Michael.  One day, when Michael’s family was visiting her toward the end of her life, she asked how Michael was doing in school.  The family explained how bright and eager Michael was, and Grandma Meredith called him over and wrote a promissory note stating that Michael would receive $5,000 dollars when he turned 18.