Practice Exam
Fall 2008
Prof. Carol B. Swanson
For Your Test Today…
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Review your Contracts texts:
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Summers/Hillman pp. 47-49, 56-58
Knapp/Crystal/Prince, pp. 71-75, 87-90
Hamer v. Sidway (NY Ct App 1891)(uncle
promises nephew $5,000 for abstaining from
alcohol, tobacco, cursing, gambling)
Dougherty v. Salt (NY Ct App 1919)(aunt
gives 8-yr-old nephew a $3,000 note for
“value received”)
CONTRACTS in a NUTSHELL
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Contracts are enforceable promises
Not all promises are enforceable
So how do we determine which promises
should be enforced?
PRIMARY MECHANISM—
CONSIDERATION!
Consideration = bargained-for exchange
Consideration “Gold Nuggets”
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Benefit to the promisor OR detriment to the
promisee (one way to ascertain existence of
bargained-for exchange)
Gift promises/conditional gifts
Past consideration (is no consideration)
Nominal consideration (in name only)
Adequacy of consideration (almost) never
questioned! (peppercorn)
Case Briefing: Hamer v. Sidway
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Case Name/Court/Date:
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Hamer v. Sidway (N.Y. Ct. App. 1891)
Procedural Posture (Facts?):
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P acq’d K claim as remote assignee from nephew
D is executor of uncle’s estate
Special Term trial: J/P
Supreme Ct (Gen’l Term): Rev’d & rem’d
Here: Ct App reverses, affirms Special Term (J/P)
Case Briefing: Hamer v. Sidway Facts
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Uncle told his nephew that if the nephew refrained
from drinking liquor, using tobacco, swearing, and
playing cards or billiards for money until he became
21, then the uncle would pay him $5,000.
Nephew agreed and fully performed.
When nephew turned 21, parties mutually agreed
that the uncle would hold the $5,000 until the
nephew is capable of “taking care of it.”
Uncle died (12 yrs later) without having paid
nephew.
P acq’d K claim as remote assignee from nephew.
D is executor of uncle’s estate.
Case Briefing:
Hamer v. Sidway Issue & Holding
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Does the consideration doctrine’s
benefit/detriment analysis render enforceable
a promise to pay money in return for the
promisee’s agreement to give up liquor,
tobacco, swearing, and gambling, even though
the promisee arguably benefited from
performance, and no benefit to the promisor
has been demonstrated?
Held: YES.
Case Briefing: Hamer v. Sidway Analysis
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Court cites various consideration definitions:
 “may consist either in some right, interest, profit or
benefit accruing to the one party, or some
forebearance, detriment, loss or responsibility given,
suffered or undertaken by the other” –Exchequer
Chamber (1875)
 “In general, the waiver of a legal right at the request
of another party is a sufficient consideration for a
promise”
--Parsons
 “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.” –Pollock
Case Briefing: Hamer v. Sidway Analysis
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Promisee nephew had legal right to use tobacco,
drink liquor; he abandoned rights for years, based on
his uncle’s promise
This forbearance furnishes good consideration,
regardless of what effort was required to forego
these activities, or whether the nephew or uncle
benefited from the forbearance
Ct favorably cites several cases finding consideration
where the promisee gave up legal rights: Lakota
(drinking); Talbott (tobacco)
Case Briefing: Hamer v. Sidway Rules
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Consideration may consist either in some right, interest, profit
or benefit accruing to the promisor, or some forebearance,
detriment, loss or responsibility given, suffered or undertaken
by the promisee.
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.
In general, the waiver of a legal right at the request of another
party is a sufficient consideration for a promise.
If a promisee agrees to forego his legal right to engage in
certain activities (like drinking and smoking), that
forebearance is good consideration supporting the promise to
pay.
What Does Dougherty Add?
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Aunt hands $3,000 promissory note to 8-yrold nephew (printed form contains the words
“value received”), saying to him “You have
always done for me, and I have signed this
note for you”, and telling his mother that she
loved the child, wanted to take care of him.
Why does the court conclude that this promise
is NOT enforceable?
Mary SAMPLE EXAM
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Read exam directions
Answer the question(s)
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Can Mary recover from CT, Grumpo, or Bong?
Allocate your time
Keep in mind the “BIG PICTURE”
IRAC
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Issue, Rule, Analysis, Conclusion!
Mary/CT Sample EXAM
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Can Mary recover $1,000 from CT under contract
law principles?
 “Can Mary recover from any of them?”
Promise + Consideration (Bargained-for exchange)
NOTE other possibilities (you’ll discuss these in
Contracts this fall):
 Promissory Estoppel (Promise + Detrimental
Reliance)
 Promissory Restitution (Promise + Moral
Obligation)
Mary/CT ISSUE:
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Did Mary & CT form an enforceable
contract, based on CT’s representations at
the family gathering and her going meatfree for one year?
In other words, did CT’s representations
constitute a promise to pay Mary if she
remained meat-free for a year, and did her
actual performance provide good
consideration, rendering his commitment
enforceable?
PROMISE + CONSIDERATION!
Mary/CT
RULES + ANALYSIS: PROMISE
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Define it: An unambiguous statement of commitment
to do or not do something
How to determine it: Look to surrounding context,
language actually used, etc.
ANALYSIS HERE:
 Family gathering
 “Just stop eating meat for one year! If you can
accomplish that, you certainly would deserve
$1,000!”
 Unambiguous statement of commitment?
Tough to find clean “promise” here
 If no promise, no binding deal
 If promise (or not clear), then we need to consider
the next issue...
Mary/CT
RULES + ANALYSIS: CONSIDERATION
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Define it: Bargained-for exchange
How to determine it:
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Benefit to the promisor OR detriment to promisee
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Waiver of a legal right at the request of another party is a
detriment to the promisee providing sufficient consideration
to enforce promise, regardless of whether the promisee is
otherwise “benefited” by the deal
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Look to surrounding context
ANALYSIS HERE: (like Hamer v. Sidway)
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Mary gave up a legal right (right to eat meat) for one year,
and that forbearance is a detriment that supports the finding
of consideration
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Although she may have enjoyed certain health benefits along
the way, that does not offset the detriment she incurred
Can Mary Obtain Relief from CT?
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Can Mary obtain relief under contract principles?
She probably cannot.
Her primary difficulty is the absence of an
unambiguous commitment by CT to pay her for
performing. His language is suggestive, but seems to
fall short of a true “promise.”
If, however, a court finds a “promise,” then Mary’s
performance (giving up a legal right by not eating
meat) does provide legal consideration, and the
promise would be enforceable.
Mary/Grumpo
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Can Mary recover $1,000 from Grumpo under contract law
principles?
 “Can Mary recover from any of them?”
 Promise + Consideration (Bargained-for exchange)
Did Grumpo’s note create an enforceable contract to pay
$1,000?
In other words, does consideration support Grumpo’s promise
to pay $1,000 when it is given “for all [Mary] has
accomplished” and for “good value received”?
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Bargained-for exchange?
Mary/Grumpo
RULES + ANALYSIS: CONSIDERATION
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Define it: Bargained-for exchange (presumably already
done)
How to determine it:
 Benefit to the promisor OR detriment to promisee
 Look to surrounding context: what did these parties
“bargain for”?
ANALYSIS HERE: (like Doherty v. Salt)
 NOTE content:
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“for value received” does not establish consideration
“for all [Mary] has accomplished”—not bargained for
OTHER: favorite niece enriched aunt’s life (not
bargained for)
Can Mary Obtain Relief from Grumpo?
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Can Mary obtain relief under contract principles?
No.
The facts do not support the finding of a bargained-for
exchange.
The words “good value received” are not conclusive.
Grumpo cannot bargain for Mary’s past acts:
 Favorite niece who enriched Grumpo’s life
 “for all [Mary] has accomplished”
This is an unenforceable gift, not a contract supported by
consideration.
Mary/Bong
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Can Mary recover $50 from Bong under
contract law principles?
 “Can Mary recover from any of them?”
 Promise + Consideration (Bargained-for
exchange)
Is Bong’s promise to pay $50 if Mary
abstained from smoking dope enforceable?
Mary/Bong
RULES + ANALYSIS: CONSIDERATION
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Define consideration, explain how to
determine: Been there, done that!
ANALYSIS HERE:
 Smoking abstention (twist on Hamer):
 Mary DOES give up something, BUT...
 MOTIVE: doesn’t matter that she “had
very little interest in smoking dope”
Can Mary Obtain Relief from Bong?
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Can Mary obtain $50 under contract principles?
 No (unless you are in a jurisdiction that permits
smoking dope).
 The facts do not support the finding of a
bargained-for exchange.
 Mary gave up an act she had no legal right to
perform (as a matter of public policy, that’s no
bargained-for exchange)
TIPS for Exam-Taking SUCCESS
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Start Today (set up OUTLINE for each class)
Communicate
Keep in mind the “BIG PICTURE”
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Issues/doctrines, not individual cases
Cases demonstrate important CONTEXT
Read the question, particularly the “ask,” closely
Allocate your time wisely
IRAC structure
Maintain your sanity
Good Luck!
Enjoy Your Fall Semester!
Questions or concerns? Feel free to contact me…
Carol Swanson
cswanson@hamline.edu
651-523-2138