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EconLawTest2Cases - Hamer v Sidway Court of Appeals of New...

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Hamer v. Sidway Court of Appeals of New York, 1891 Wm. E. Story, Sr. promised his nephew, Wm. E. Story, 2d, that he would pay him $5,000 if the nephew would refrain from drinking, using tobacco, & playing cards or billiards for money until he was 21 years old. The nephew satisfied these requirements & asked for the money. The uncle said he would give him the money when he got his feet on the ground. The nephew never got the money & transferred the right to receive the money & interest to Hamer. Then the uncle died. Hamer sued the executor of the uncle’s estate (Sidway) for the $5,000 plus interest. The defendant (Sidway) contended that the contract was without consideration & thus should not be enforced. D contended that the contract was invalid because it lacked consideration and that there is no consideration unless the promisor is benefited. The court stated that consideration may consist in either a some right, interest, profit, or benefit to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other. It is immaterial whether the consideration does in fact benefit the promisee or a third party or is of substantial value to anyone. Refraining from something that one is entitled to do is a sufficient detriment to create an enforceable contract. Disposition: Reversed in favor of Hamer (P). Batsakis v. Demotsis Court of Civil Appeals of Texas, 1949 Demotsis found herself in difficult circumstances in Nazi-occupied Greece & borrowed money from Batsakis--Greek currency worth about $25 at the time. She signed a promissory note to repay the loan in U.S. currency--explicitly agreeing to pay $2,000 + interest. After the war the two met in the U.S. & Batsakis sought repayment of the full note but Demotsis offered to pay only $25 plus interest. For some unexplained reason, the jury in the trial in Texas awarded Batsakis $750 plus interest. Batsakis appealed. The defendant received what she contracted for by under the terms of the agreement according to her own testimony. The court did find however that the trial court should have entered judgment in favor of the plaintiff for the full $2000 plus 8% interest per year from April 2, 1942 according to the terms of the agreement. Disposition Reversed and reformed.
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Hadley v. Baxendale Court of Exchequer, 1854 9 Exch. 341. Holding and Rule An injured party may recover those damages reasonably considered to arise naturally from a breach of contract, or those damages within the reasonable contemplation of the parties at the time of contracting. Damages for special circumstances are assessed against a party only when they were reasonably within the contemplation of both parties as a probable consequence of a breach. The court held that in this case Baxendale did not know that the mill was shut down and would remain closed until the new shaft arrived.
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