Business Law ( responses must be one paragraph)

1.Smith made a contract to sell automatic rifles to a foreign country. Because the sale of such weapons to that country was illegal under an act of Congress, the U.S. government prosecuted Smith for making the contract. He raised the defense that because the contract was illegal, it was void and there is no binding obligation when a contract is void; therefore, no contract for which he could be prosecuted existed. Was he correct?

2.William E. Story agreed to pay his nephew, William E. Story II, a large sum of money (roughly equivalent to $50,000 in 2007 dollars) “if he would refrain from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he should come to be 21 years of age.” William II had been using tobacco and occasionally drank liquor but refrained from using these stimulants over several years until he was 21 and also lived up to the other requirements of his uncle’s offer. Just after William II’s 21st birthday, Story acknowledged that William II had fulfilled his part of the bargain and advised that the money would be invested for him with interest. Story died, and his executor, Sidway, refused to pay William II because he believed the contract between Story and William II was without consideration. Sidway asserted that Story received no benefit from William II’s performance and William II suffered no detriment (in fact, by his refraining from the use of liquor and tobacco, William II was not harmed but benefited, Sidway asserted). Is there any theory of consideration that William II can rely on? How would you decide this case? [Hamer v Sidway, 124 NY 538]


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