Without a complete and detailed background, Hamer v Sidway involved an uncle promising his nephew a lump sum of money if the nephew could refrain from drinking alcohol, smoking, swearing, and gambling until his 21st birthday. The nephew fulfilled his end of the promise, and the uncle acknowledged that the nephew had rightfully earned the money but asked if he could hold the money in the bank until the nephew was responsible enough to care for it. The uncle died however, and Hamer, the party with legal claim to the money was denied payment by the executor of the will, Sidway. Sidway argued that the $5000 was without consideration because the nephew had benefited from the actions he undertook to receive the award.
There were two specific legal questions that were brought before the court. One being whether or not the nephew and uncle officially and legally agreed upon this promise, and the second being the careful examination of the definition of consideration in regards to a contract. Under investigation the court did find that the contract was binding on a certain date between the two related parties. The findings in relevance to consideration are explained below in correlation with the ruling.
Originally Hamer, the plaintiff, recovered at trial, but the judgment was reversed upon appeal by Sidway. When Hamer appealed to the Court of Appeals of New York, he, the plaintiff, eventually won the suit after careful review.
The court’s reasoning for the decision was based upon the examination of consideration. Sidway had denied payment on the account that the nephew had benefited from the actions taken, regardless of his uncle’s proposal, and that the promisor, his uncle, was not benefited in any way. The court however was less concerned with whether the promisee happened to benefit from the proposal, but more concerned with how the nephew had given up his legal rights to drink alcohol, smoke tobacco, swear, and...