Hamer v. Sidway
124 N.Y. 538, 27, N.E. 256 (N.Y. 1891)
- At a large party, Uncle Story promised Nephew Story that if he didn’t drink before 21, he’d pay him $5k.
- $5k was a lot of money in those days.
- Nephew Story did as he was told, and when he turned 21 he wrote his uncle for the money. Uncle wrote him a letter saying he had the money in the bank, but would hold it for him.
- Several years later he died without giving any money to Nephew Story.
- Nephew Story sold the promise of $5k to Hamer, who then sued the executor of the estate for the money (Sidway was the executor).
- The Trial Court found for Hamer. Sidway appealed.
- The Trial Court found that it was indeed a valid contract, and that Nephew Story had lived up to his part of the bargain.
- Sidway claimed that the contract was without consideration and was therefore void. By not drinking the promisee was not harmed, but benefited!
- The Appellate Court reversed. Hamer appealed.
- The New York Supreme Court reversed and awarded the $5k to Hamer.
- The New York Supreme Court found that, based on the definition of consideration, consideration had been given.
- The Court found that it does not matter what the consideration is, or what it is worth to whom, it just matters that one person gives something up in exchange for something else.
- Btw, the nephew could not give up the right to drink until 21 under today’s law because that would be illegal. A consideration could not be a promise to give up something that you can’t legally do.