124 NY 538 (1891)
Throughout its history, the New York Court of Appeals has issued many impactful decisions that have influenced the development of the law.[1] An example familiar to countless first-year law students is Hamer v. Sidway, where the court held that a young man who gave up his right to engage in legal activities such as drinking or smoking in exchange for a promise of money could enforce that promise even though the person who made the promise did not receive any tangible material benefit in return.
In 1869, William E. Story promised his 15 year-old nephew that he would pay him $5,000 if he “refrain[ed] from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he should become 21 years of age.” Six years later, the uncle acknowledged in writing that the nephew had performed his part of the bargain but decided, with the nephew’s consent, that he would hold on to the money a little longer “till I think you are capable of taking care of it.” The uncle died 12 years later without having paid his nephew. The uncle’s executor refused to make good on the promise, contending that the contract was invalid for lack of consideration.
A trial before the Special Term of Chemung County Supreme Court resulted in a judgment in the plaintiff’s favor. The judgment was unanimously reversed by the General Term of the Supreme Court in the Fourth Department, which ordered a new trial. The Court of Appeals in turn unanimously reversed and affirmed the judgment of the Special Term.
The executor argued that the contract was not enforceable because adequate consideration had not been given for the uncle’s promise. The nephew’s abstinence from the litany of vices prescribed by the uncle did not bestow a material benefit on the uncle. Moreover, it was not detrimental, but in fact beneficial, to the nephew.
Judge Alton B. Parker rejected this argument and concluded that the nephew had given adequate consideration for his uncle’s promise. Sufficient consideration to support a contract exists when a person forbears from doing something that the person has a legal right to do.
[T]he promisee used tobacco, occasionally drank liquor, and he had a legal right to do so. That right he abandoned for a period of years upon the strength of the promise of the testator 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 no moment whether such performance actually proved a benefit to the promisor, and the court will not inquire into it, but were it a proper subject of inquiry, we see nothing in this record that would permit a determination that the uncle was not benefited in a legal sense.
Judge Parker’s opinion was premised on the conclusion that the agreement was supported by consideration, but much of his language and reasoning foreshadowed the soon to emerge doctrine of “promissory estoppel,” an exception to the requirement of consideration that allows a promise to be enforced if it reasonably and foreseeably induces detrimental action or forbearance on the part of another and where injustice can be avoided only by enforcing the promise.[2]
[1] Stewart E. Sterk, The New York Court of Appeals: 150 Years of Leading Decisions, “There Shall be a Court of Appeals . . . “ (1997), at 50.
[2] Id. at 53.