One line of analysis used to explain market transactors' choice between legally enforceable contracts and extralegal contracts focuses on the transaction costs of negotiating and drafting legally enforceable agreements. It is not clear, however, a priori that these costs are necessarily higher than those incurred in the formation of an extralegal contract consummated with a handshake. Because the ability of the promisee to enforce an extralegal contract depends on the posting of a reputation bond

Lisa Bernestein, Opting out of the Legal Sys…, loc. 126