Hamer v. Sidway, 124 N.Y. 538:

Material Facts:

An uncle, William E. Story, promised his nephew a sum of $5,000 if the nephew refrained from using drugs and consuming alcohol till he is 21 years of age. The nephew agreed and refrained from using drugs and consuming alcohol. The nephew sought to claim the reward money after the death of William E. Story.

Procedural History:

At the circuit court, it was held that the testator's inter vivos promise to his nephew was a binding contract. On appeal, the court granted the appeal on grounds that the promisee did not provide sufficient consideration and that the promise was not intended to create legal relations. The case is now the Court of Appeals of New York for determination.

Issues:

1. Whether or not the promisee provided sufficient consideration in exchange for the promise.

Argument of the Defendants:

1. That the decision by the appellant to stop using drugs and consuming alcohol personally benefitted him and not his uncle.

2. That the appellant did not provide sufficient consideration to the uncle.

Holding:

1. That the promisee provided sufficient consideration in exchange for the promise

Ratio Decidendi:

The court ruled that consideration is sufficient if the promisee promises, does, or forbears something in exchange for the promise made to him. A waiver of the legal right to drink by the appellant was considered sufficient consideration. Parker J in delivering the ruling of the court stated that the court need not “speculate on the effort which may have been required to give up the use of those stimulants. It is sufficient that he restricted his lawful freedom of action within certain prescribed limits upon the faith of his uncle's agreement, and now having fully performed the conditions imposed”