Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256 (N.Y. 1891), was a noted decision by the New York Court of Appeals (the highest court in the state), New York, United States. It is an important case in Americancontract law by establishing that forbearance of legal rights (voluntarily abstaining from one's legal rights) on promises of future benefit made by other parties can constitute valid consideration (the element of exchange generally needed to establish a contract's enforceability in common lawsystems), and, in addition, unilateral contracts (those that benefit only one party) were valid under New York law.
Louisa Hamer, the plaintiff, brought suit against Franklin Sidway, the executor of the estate of William E. Story I, the defendant, for the sum of $5,000. On March 20, 1869, William E. Story had promised his nephew, William E. Story II, $5,000 if the nephew would abstain from drinking alcohol, using tobacco, swearing, and playing cards or billiards for money until the nephew reached 21 years of age. Story II accepted the promise of his uncle and refrained from the prohibited acts until he turned the agreed-upon age. After celebrating his 21st birthday on January 31, 1875, Story II wrote to his uncle and requested the promised $5,000. The uncle responded to his nephew in a letter dated February 6, 1875 in which he told his nephew that he would fulfill his promise. Story I also stated that he preferred to wait until his nephew was older before actually handing over the extremely large sum of money. The elder Story also declared in his letter that the money owed to his nephew would accrue interest while he held it on his nephew's behalf. The younger Story consented to his uncle's wishes and agreed that the money would remain with his uncle until Story II became older.
Story I died on January 29, 1887, without having transferred any of the money owed to his nephew. Story II had meanwhile transferred the $5,000 financial interest to his wife, who had later transferred that financial interest to Louisa Hamer on assignment. The elder Story's estate refused to grant Hamer the money and believed there was no binding contract since there was a lack of consideration. As a result, Hamer sued the estate's executor, Franklin Sidway.
Opinion of the court
The trial court ruled in favor of Hamer. This decision was reversed on appeal. The Court of Appeals, the highest court in New York, reversed and directed that the judgment of the trial court be affirmed, with costs payable out of the estate. JudgeAlton Parker (later Chief Judge of the Court of Appeals), writing for a unanimous court, wrote that the forbearance of legal rights by Story II, namely the consensual abstinence from "drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he should become 21 years of age" constituted consideration in exchange for the promise given by Story I. Because the forbearance was valid consideration given by a party (Story II) in exchange for a promise to perform by another party (Story I), the promiser was contractually obligated to fulfil the promise.
Parker cited the Exchequer Chamber's 1875 definition of consideration: "A valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other." The executor of Story I's estate, Sidway, was therefore legally bound to deliver the promised $5,000 to whoever currently held the interest in the sum, which by the time of the trial was Hamer.
Influence
Hamer is very common reading in first-year contracts courses at American law schools. The view of contracts operative in Hamer was grounded in a particular theory of consideration, the "benefit-detriment theory" (as exemplified in the Exchequer Chamber's 1875 definition). However, since the early 20th century (especially as embodied in the First and Second Restatements of Contracts), a dominant view has been the "bargain theory," which is that a typical contract must consist of a bargained-for exchange which is an agreement in which each party provides a promise or performance in return for a promise or performance from the other. Thus, Hamer was decided on the basis of a legal theory that has largely been replaced or supplemented by newer theory and so similar cases may be viewed differently by contemporary courts.
Estoppel is a judicial device in common law legal systems whereby a court may prevent or "estop" a person from making assertions or from going back on their word; the person so prevented is said to be "estopped". Estoppel may prevent someone from bringing a particular claim. Legal doctrines of estoppel are based in both common law and equity. Estoppel is also a concept in international law.
Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from doing an act. In broad terms, if one agrees to do something he was not otherwise legally obligated to do, it may be said that he has given consideration. For example, Jack agrees to sell his car to Jill for $100. Jill's payment of $100 is the consideration for Jack's promise to give Jill the car, and Jack's promise to give Jill the car is consideration for Jill's payment of $100.
The doctrine of privity of contract is a common law principle which provides that a contract cannot confer rights or impose obligations upon anyone who is not a party to that contract. It is related to, but distinct from, the doctrine of consideration, according to which a promise is legally enforceable only if valid consideration has been provided for it, and a plaintiff is legally entitled to enforce such a promise only if they are a promisee from whom the consideration has moved.
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Consideration is an English common law concept within the law of contract, and is a necessity for simple contracts. The concept of consideration has been adopted by other common law jurisdictions, including in the United States.
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A third-party beneficiary, in the law of contracts, is a person who may have the right to sue on a contract, despite not having originally been an active party to the contract. This right, known as a ius quaesitum tertio, arises when the third party is the intended beneficiary of the contract, as opposed to a mere incidental beneficiary. It vests when the third party relies on or assents to the relationship, and gives the third party the right to sue either the promisor or the promisee of the contract, depending on the circumstances under which the relationship was created.
Balfour v Balfour [1919] 2 KB 571 is a leading English contract law case. It held that there is a rebuttable presumption against an intention to create a legally enforceable agreement when the agreement is domestic in nature.
The pre-existing duty rule is an aspect of consideration within the law of contract. Originating in England the concept of consideration has been adopted by other jurisdictions, including the US.
Beswick v Beswick[1967] UKHL 2, [1968] AC 58 was a landmark English contract law case on privity of contract and specific performance. The House of Lords, overruling the decision of Lord Denning in the Court of Appeal, ruled that a person who was not party to a contract had no independent standing to sue to enforce it, even if the contract was clearly intended for their benefit.
Tweddle v Atkinson[1861] EWHC J57 (QB), (1861) 1 B&S 393 is an English contract law case concerning the principle of privity of contract and consideration. Its panel of appeal judges reinforced that the doctrine of privity meant that only those who are party to an agreement may sue or be sued on it and established the principle that "consideration must flow from the promisee".
Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts. The concept has been adopted by other common law jurisdictions.
Batsakis v. Demotsis, 226 S.W.2d 673, was a 1949 decision by the Texas Court of Appeals, United States which was an appeal from a judgment of the 57th judicial District Court of Bexar County, Texas. In the case, George Batsakis (Plaintiff) sued Eugenia Demotsis (Defendant) to collect on a promise Demotsis had made, in 1942 in war-torn Greece, to pay at a later date to Batsakis $2,000 dollars with interest at the rate of 8% per annum from April 2, 1942, in exchange for 500,000 drachmae given at the time of the execution of the contract. On appeal, the court found for Batsakis.
The Indian Contract Act, 1872 prescribes the law relating to contracts in India and is the key regulating Indian contract law. Then the principles of English Common Law. It is applicable to all the states of India. It determines the circumstances in which promises made by the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act defines a contract as an agreement enforceable by Law.
Contract law regulates the obligations established by agreement, whether express or implied, between private parties in the United States. The law of contracts varies from state to state; there is nationwide federal contract law in certain areas, such as contracts entered into pursuant to Federal Reclamation Law.
White v Bluett (1853) 23 LJ Ex 36 is an English contract law case, concerning the scope of consideration in English law.
Privity is a doctrine in English contract law that covers the relationship between parties to a contract and other parties or agents. At its most basic level, the rule is that a contract can neither give rights to, nor impose obligations on, anyone who is not a party to the original agreement, i.e. a "third party". Historically, third parties could enforce the terms of a contract, as evidenced in Provender v Wood, but the law changed in a series of cases in the 19th and early 20th centuries, the most well known of which are Tweddle v Atkinson in 1861 and Dunlop Pneumatic Tyre v Selfridge and Co Ltd in 1915.
Shadwell v Shadwell [1860] EWHC CP J88 is an English contract law case, which held that it would be a valid consideration for the court to enforce a contract if a pre-existing duty was performed, so long as it was for a third party.
Re Vandervell Trustees Ltd [1974] EWCA Civ 7 is a leading English trusts law case, concerning resulting trusts.
Dutton v Poole (1678) is a landmark decision in the Court of Chancery.
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