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Hamer v. Sidway

From lawbrain.com

Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256 (N.Y. 1891), is case that answers the question of whether the giving up of one’s certain rights in exchange for a promised future benefit could constitute valid consideration for the formation of a contract.

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Contents

Summary of Case Facts

William E. Story I (“Story I”) promised, to his fifteen year old nephew, William E. Story II (“Story II”), a sum of $5000 should he refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until he reached 21 years of age. Story II did in fact refrain from such activities and on his 21st birthday wrote a letter to his uncle requesting the promised sum of $5000. Story I agreed to give him the funds, but preferred to hold the money and disburse it to Story II once he was older, with the inclusion of interest. Story II agreed. As time passed, Story II transferred the interest in the money to his wife, who later transferred her interest in the money to the plaintiff, Louisa Hamer. The plaintiff sought to redeem the interest from the now-deceased Story I’s estate, and was refused by the executor and defendant, Franklin Sidway. Plaintiff filed suit against the estate for the sum of money once promised to Story II.

Issue

Does one’s refraining from engaging in permissible activities constitute sufficient consideration to form a contract?

Holding and Law

Yes. The abstinence from engaging in the activities proscribed by Story I until Story II’s attainment of 21 years of age constituted valid consideration for the promise given by Story I to pay Story II should he adequately perform according to the terms of the offer.

The court went on to say that not only is valid consideration a right, benefit, or interest awarded to one party, but can also be a forbearance, detriment, loss, or some other responsibility undertaken or suffered by the other party.

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