A contract cannot be formed without consideration. But what exactly is consideration? Put simply, consideration is something given in exchange for a promise.
The case of Hamer v. Sidway, 27 N.E. 256 (1891), remains one of the most studied cases on consideration.
It all began when young William Story II (Story) was still a teenager. Story’s uncle made him a promise. If Story would abstain from drinking, using tobacco, swearing, or gambling until he turned 21, his uncle would pay him $5,000. (There were no age restrictions at the time that would’ve barred Story from engaging in those activities otherwise.)
Story agreed and held up his end of the bargain. However, Story’s uncle died before making payment. Story’s assignee attempted to collect. The estate refused to pay, arguing that Story’s uncle derived no benefit and Story was better off for never having participated in such vices.
Ultimately, the New York Court of Appeals concluded that Story had given adequate consideration for his uncle’s promise, because a person’s forbearing from doing something the person has a legal right to do is sufficient consideration to support a contract.
Today, more than a hundred years after its issuance, Hamer v. Sidway is still featured in well over a dozen law school casebooks.
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