Hamer v. Sidway
124 N.Y. 538, 27 N.E. 256 (1891)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Forbearance from a permissible legal action constitutes sufficient consideration to support an enforceable contract, regardless of whether the promisor receives any actual benefit or the promisee suffers any actual detriment.
Facts:
- On March 20, 1869, William E. Story promised his nephew, William E. Story, 2d, that if the nephew refrained from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he turned 21, the uncle would pay him $5,000.
- The nephew agreed to the terms and fully performed his obligations under the agreement.
- Upon turning 21, the nephew wrote to his uncle informing him that he had upheld his end of the bargain and requested the $5,000.
- The uncle replied in a letter, confirming the debt and stating that the nephew had earned the money and that he would hold it for him with interest until the nephew was capable of managing it.
- The nephew consented to his uncle holding the money under these terms.
- The nephew later assigned his right to the $5,000 to his wife, who subsequently assigned it to the plaintiff, Hamer.
Procedural Posture:
- The plaintiff, Hamer, as the assignee of the nephew's claim, presented the claim to Franklin Sidway, the executor of William E. Story's estate.
- The executor rejected the claim.
- Hamer sued Sidway in a New York court of first instance (the Special Term), and the court found in favor of the plaintiff, Hamer.
- The defendant, Sidway, appealed to the intermediate appellate court (the General Term of the Supreme Court).
- The General Term reversed the trial court's judgment.
- The plaintiff, Hamer, appealed the General Term's decision to the New York Court of Appeals, the state's highest court.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a promisee's forbearance from exercising a legal right constitute sufficient consideration to support a contract, even if such forbearance benefits the promisee and does not directly benefit the promisor?
Opinions:
Majority - Parker, J.
Yes, a promisee's forbearance from exercising a legal right constitutes sufficient consideration to support a contract. A valuable consideration may consist of some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other. The court will not inquire whether the consideration was of substantial value or if it actually benefited the promisee. The nephew had a legal right to engage in the proscribed activities; his abandonment of that right for a period of years in reliance on his uncle's promise is sufficient detriment to form consideration. It is enough that the promisee restricted his lawful freedom of action, and it is of no moment whether this performance ultimately proved to be a benefit to him.
Analysis:
This case is a foundational pillar in contract law, firmly establishing that forbearance from a legal right is a valid form of consideration. The decision clarifies that the concept of 'detriment' in consideration does not require actual harm or loss, but merely the waiver of a legal entitlement. By refusing to assess the adequacy of consideration or whether the performance was beneficial to the promisee, the court reinforced the principle that contracting parties are free to bargain for whatever performance they choose. This ruling has had a lasting impact, broadening the scope of enforceable promises to include those based on commitments to abstain from certain behaviors.
