Family members make all sorts of promises to each other. Some of them are quite realistic and others quite outlandish. So when an uncle gets up at a family gathering, toasting his young nephew, and offering him $5,000 if he refrains from “drinking, smoking, cursing, and gambling” for the next five years, is a contract made?

Today in my contracts class, we discussed an interesting case, Hamer v. Sidway, in which this scenario is played out. The court eventually rules that the uncle’s promise (which was backed up in writing later on) did indeed constitute a contract. The uncle had contended that the boy had already received a benefit in abstaining from the previously discussed vices, and he owed nothing else to to boy. But this was not enough for the court. The court’s rationale was simple: the uncle’s lofty remarks were not the indication of a mere gift (which can be backed out of practically on a whim) because the nephew had to give up certain actions, otherwise legal, in return for the money.

But what if the uncle had promised the money on the condition that the boy refrain from illegal acts? (For fun, let’s just say the nephew was a regular heroin user.) The uncle’s remarks, according to the court would not form a contract. Is this fair to the boy? Was the ruling fair to the uncle? Thoughts?

Daniel Corbett