Just a quick fridge thought I had. In traditional fantasy, a knight takes a vow. In CoE I can forsee contracts being very useful for this. In my head there are two ways to do this with distinctions for Knights and Paladins.
A knight can only be knighted by a King. And only once they're at a certain combat ability with their chosen weapon. Let's say they need to reach at least Master level. Once knighted, the king gives the knight a vow which he must uphold. A vow is special contract that only Kings and Religious heads have access to. A vow must be upheld at all times. The exact vow is made at the discretion of the King. But a potential knight can refuse this vow. As long as they are willing to deal with the concequences of defying their monarch. A knight must follow this vow and if broken, they are punished. The exact punishment is again at the discretion of the King but will most likely involve stripping of titles and assets if not execution.
A knight upon accepting their vow is given modest land, usually no more than a manor, some small farmland and a title. They can join knightly orders and share an armoury within that order. But the focus on being a knight is upholding your vow. You must be seen to be pursuing the spirit of that vow. If your vow is to uphold the kingdom and defeat it's enemies, then that is what you must do at all times. Being a Knight is a huge responsibility. It should be considered carefully by both Player and King if a Knighthood is in their best interests. It is not an "alpha class". If anything it is a hardcore mode. You are restricted from engaging in dishonest tactics, can never run from a battle or slight your king. And must hold to the code of chivalry. Even if it's a ball ache and you really want to slap around that twelve year old who just disparaged the virtue of your mother.
A Paladin works very similarly with a key difference. Whilst they take a vow, a Paladin is embued with holy power. They can only be knighted by the head of their religion and only once reaching legendary status with their chosen weapon. There can only be one Paladin per religion per server. A paladin has access to holy spells that vary depending on their religion. But will contain powerful buffs and healing magic unavailable to everyone else. A Paladin can expect youth for much longer than a common man and their live span is doubled. They are immune to poison, and do not fatigue as easily as lesser men. However A Paladin's lot is a hard one. They live for his religion and nothing else. They cannot Marry or have children. They can hold no land, nor property beyond their armour and weapons which are provided by the church. They live in poverty and humility. While their powers are great, the gods are fickle and one must tread carefully to not anger them.
A Religious head can also strip you of paladin hood even if they're not the religous head who knighted you in the first place. Political machinations can screw you over (This is tempered by only legendary warriors being allowed to be paladins). Being a Paladin makes you a constant target. A Paladin is rare, and the prestige of killing one is too hard for most to resist. Rival religous NPCs will attack you at every oportunity. And if a player kills you. They receive a phenominal amount of Story Points. If you manage to make it to the end of your life whilst still holy, your soul is touched by the gods. This is a special buff that your next subsequent character will have. The buff marks you as a decendant of a noble lineage and you will train in your previous character's favoured weapon 50% faster. However this buff is only active for that character. If they do not become a Paladin the next character you make with that soul will not have the buff.
Anyways, that's my verbal diahrea. Anyone have any thoughts?