the devil is a character from legend, religious writings, and other literary works. What is the effect in Irving's story of using this stereotyped figure?

Correct, many stories have been written following similar plots..... specifically, a man who seel his soul to the Devil is exchange for something he covets.... be it money, fame, or knowledge. Using this well known plot alerts the reader to one main fact..... selling your soul to the Devil never ends well. This is foreshadowing.