Thursday, October 1, 2020
In the first part of this series, I provided an overview of my reasons for thinking the court got things wrong in Hamer. In Part II, I reviewed Douglas Baird's fascinating reconstruction of the case, which provides further grounds to doubt the court's conclusion in that case. Part III was a silly digression into the difficulty of refraining from cursing. You should probably skip that part. Today, I get back to a discussion of doctrine and the part of the case that I think is important to explore in some detail with students.
I am confident that the holding of Hamer v. Sidway is that a legal detriment counts as consideration. But what of other detriments? On the Promises, Promises podcast, Tess Wilkinson-Ryan and Dave Hoffman agree that it would be absurd if a promise to refrain from drinking constituted consideration where the promisor was legally permitted to drink but not where she was not legally permitted to drink.
As a matter of doctrine, I don't think it's the least bit absurd. Bargains involve one party doing something (or refraining from doing something) in order to induce a reciprocal action or inaction from the other side. If a party is already legally obligated to refrain from doing something, we cannot tell that the other side's promise induced their inaction. Not enforcing promises to refrain from illegal conduct is consistent with not enforcing familial promises where the consideration may be love and affection. It is also consistent with the common-law pre-existing duty rule, according to which one cannot get paid more to do something one was already obligated to do.
Do I sound formalist? I believe I do, but I'm okay with that in this instance, because this is precisely the sort of situation in which a bright-line, prophylactic rule has appeal. In some situations, the law is not really much of an inducement on its own. Underage drinking is common and under-enforced. As the image to the left suggests, one may be a saint and still find no fault in the act. Penalties are minimal, and compared with the inducement of $5000 in 1875, the law's inducement to sobriety is insignificant.
But we can tweak the hypothetical. What if his illegal conduct was something that was more likely to land Willy in serious legal trouble, and what if William's promise had not been $5000 but $50? Now the relative powers of the criminal and contractual inducements are reversed. If it is absurd that the enforceability of the promise should turn on whether Willy can legally drink alcohol in New York State, it is equally absurd if the enforceability should turn on how much William is willing to pay or how likely the police are to enforce the law that Willy is promising not to break. Such things are unknowable ex ante, and since contracts are a means of joint or communal planning, it is best to avoid uncertainty.
We don't inquire whether a particular seventeen-year-old had the cognitive maturity to bind herself through contractual obligation. We don't inquire into how much an Aunt loved her nephew when she promised him money for being a good boy. A court should not inquire into the nature of illegal conduct in determining whether a promise to refrain from such conduct should be legally binding. It never should be because we can never know the extent to which the contractual promise induced the law-abiding behavior. Most people are law abiding in most situations without added inducements.
Most contracts professors, I suspect, think there are public policy arguments that favor the opposite conclusion. I will address those arguments in tomorrow's post.