Hamer v Sidway

Dispute

A nephew and his uncle reached an agreement under which the nephew promised to abstain from the use of alcohol, tobacco, profanity, and gambling until reaching the age of 21, and under which the uncle promised to pay him the sum of $5,000.00. Following the nephew’s 21st birthday, the two exchanged letters in which the uncle affirmed the promise and stated he would hold the $5,000.00 at interest on behalf of the nephew. At the uncle’s death, the nephew sued the estate for recovery. Judgment for the plaintiff, reversed on appeal.

Rules of law

To be valid, a contract must include mutual agreement and consideration.

Consideration can be anything of value to the promisee or anything of detriment to the promisor.

“In general a waiver of any legal right at the request of another party is a sufficient consideration for a promise.”

Arguments

The executor argued that because the promise of abstaining from various vices held no detriment to the plaintiff, and was in fact a benefit to him, the requirement of consideration was not met.

The plaintiff argued that merely abstaining from something he had a legal right to do, at the request of the deceased, had been valid and sufficient consideration, and that the deceased had in fact satisfied the contract when he held the funds in trust for the plaintiff.

Conclusion

The court found for the plaintiff and pointed to numerous cases in which a promise of performing any act or abstaining from any legal right constituted valid consideration for the purposes of the formation of a contract, including specific cases in which the overall benefit to the promisor by abstinence from undesirable behavior was judged immaterial.

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