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Originally Posted by Morthoron
Tolkien did not do commerce very well; in fact, he merely ignored it unless it served a specific purpose to move the story along...
So, how were deeds and other legal transactions processed?
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I think you're right about such matters mostly being ignored and, for the purposes of his stories, I think he made a good decision. He was more interested, anyway (I think) in the more social aspects of how people interrelated and how they thought - and the effect their thinking had on their actions and deeds.
As regards legal matters, there was one other incident I recall where Otho demands to see Bilbo's will making Frodo Bilbo's heir (Otho would have otherwise inherited).
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It was, unfortunately, very clear and correct (according to the legal customs of hobbits, which demand among other things seven signatures of witnesses in red ink).
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In legal matters, the hobbits in the Shire seemed to be organized in a clan or family structure with each main family having a head. Most likely, justice was mostly handled within the family by the family/clan heads. So a formal court system (with lawyers handling prosecution, defense, etc before judges) would not have been needed or even thought of.
Interesting side note (from one of Tolkien's writings which source I would have to look for), Otho was head of the Sackville family and was hoping to gain the unusual distinction of becoming titular head of TWO families at the same time (if he had remained Bilbo's heir). Thus his wrath at being foiled by Bilbo's will was due to more than simply failing to get Bilbo's (supposed) wealth.