consideration

(2) Consideration

Harmer v. Sidway

27 N.E. 256 (N.Y.1891)

Facts: William E. Story, Sr., made a promise to his nephew, William E. Story II: if the nephew would refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until the nephew became 21 years of age, William, Sr,. would pay him $5,000, the nephew assented and fully performed. When the nephew became 21 years old, he wrote his uncle informing him that he had complied.

The uncle died without having paid his nephew any portion of the $5,000 and interest. William Story II assigned (sold) his interest to Hamer, who sued William Story, Sr.’s estate. The trial court found in favor of the plaintiff, Hamer, and on appeal, it was reversed. Hamer appealed to New York’s highest cour t. Issue: was the contract invalid for lack of consideration? Decision: (Parker, Judge) The defendant contends that the contract was without consideration to support it, and therefore invalid. He asserts that the promise, by refraining from the use of liquor and tobacco, was not harmed, but benefited; that which he did was best for him to do, independently of his uncle’s promise----and insists that it follows that, unless the promisor was benefited, the contract was without consideration---a contention which, if well founded, would seem to leave open to controversy in many cases whether that which the promisee did or omitted to do was in fact of such benefit to him as to leave no consideration to support the enforcement of the promisor’s

agreement. Such a rule could not be tolerated, and is without foundation in law. Consideration is defined as follows: “A valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other.” Courts “will not ask whether the thing which forms the consideration does in fact benefit the promise or a third party, or is of any substantial value to any one. It is enough to whom the promise is made as consideration for the promise made to him.”

“…‘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.” Now, applying this rule to the facts before us, the promisee used tobacco, occasionally drank liquor, and he had a legal right to do so. That right he abandoned for a period a period of years upon the strength of the promise of his uncle that for such forbearance he would give him＄5,000. We 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, it is of moment whether such performance actually proved a benefit to the promisor, and the court will not inquire into it…

【The trial court decision in favor of plaintiff was reinstated.】