Business Law with UCC Applications 13th Edition by Gordon Brown,Paul Sukys

Exercise 1

Literature instructors are fond of saying that a poem, a play, a novel, or a short story is considered good, sometimes even great, if it has stood the "test of time." The same is true of many legal cases. Such is the situation with the long-standing case of Hamer v. Sidway , a lawsuit that most law students and paralegals encounter at some time in their academic careers. Hamer and Sidway begins at a golden wedding anniversary celebration. At the party, Uncle William promised his nephew and namesake, William, that if he, the nephew, would give up a long list of vices that included smoking and swearing, until his 21 st birthday, he, the uncle, would pay his nephew, William, $5,000. The challenge was made in front of a room full of family members and close friends, and so, William agreed to the arrangement. Following this and in compliance with the agreement, William embarked on an extensive period of abstinence that lasted several years. Soon after his 21 st birthday, William wrote to his Uncle telling him of his accomplishments and asking for the $5,000 due to him under the contract. Uncle William wrote a lengthy letter back to young William in which he praised his nephew for his perseverance. He also promised to pay the money that was due. Unfortunately, Uncle William passed away before sending the money to his nephew. Undeterred, the nephew petitioned the executor of Uncle William's estate for payment. The executor refused to pay and William brought this lawsuit. William argued that he had performed as promised and was, therefore, entitled to the money. The executor recognized that William had, indeed, refrained from smoking and swearing, but argued that, in contract law, both sides must suffer a detriment for consideration to be valid and for a contract to exist. In this case, the executor said, young William had not suffered a detriment. In fact, the opposite was true. He was much healthier than he would have been, absent the promise, and he had, therefore, benefited greatly from giving up his bad habits for such an extended period of time. In the absence of consideration, no contract ever existed and, as a result, the estate did not owe young William a single cent. The court in the case referred to a standard treatise on contract law and noted that, consideration "means not so much that one party is profiting as that the other abandons some legal right in the present, or limits his legal freedom of action in the future, as an inducement for the promise of the first." How would you predict the court will rule in this case? Did the nephew give up enough under the law, or is his promise to Uncle William a cleverly constructed illusion? See if you can answer these questions as you read through this chapter on consideration. [See Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256 (Court of Appeals of New York).]
Would Hamer v. Sidway be a civil lawsuit or a criminal action? Explain