Contracts Class Notes 8/20/03


Hawkins v. McGee


Who sued whom?  Hawkins sued McGee.  Why?  Because Hawkins was unhappy with the result of the operation.  So what do we do when we’re not happy with a situation like this?  We go to court.  What we don’t do is go beat up Dr. McGee.


The most important thing that our civil law does is avoid civil war…we settle our disputes in the courthouse.


We have a lawsuit here because Hawkins is seriously disappointed in the results of the operation.  What’s the first thing you do when you’re going to file a lawsuit?  You hire a lawyer.  What does the lawyer do?  He/she thinks up theories that the lawyer can use to turn the plaintiff’s hurt into a remedy.  What remedy does Hawkins want?  He wants the big bucks.  (The damage cannot be undone, apparently.)  That’s overwhelmingly the remedy we’ll deal with contracts, torts, and most other civil lawsuits.


What theories does the lawyer come up with?  The lawyer sues for negligence and breach of contract.  What’s a synonym for negligence in this context?  Malpractice.  That’s another way to say professional negligence.  If you allege negligence, you allege a want of ordinary care.


What’s another theory the lawyer comes up with?  A lawyer feels more comfortable when they have both a belt and suspenders.”


What happened to the negligence claim in the lawsuit?  It was thrown out.  A nonsuit was ordered on the writ of negligence.


We are going to learn about the roles of the trial judge, jury, and appellate court in contract cases.


The trial judge orders a nonsuit.  The trial judge takes the negligence claim away from the jury.  They’re not allowed to think about it.  On what basis does the judge do that?  The judge can find that no reasonable person could find negligence.  The judge believes it would be irrational for the jury to find negligence.  The plaintiff has a loser on this count and it never goes to the jury.


The jury could come out with an irrational verdict if they’re swayed by emotional attachment to one the parties.


What do we mean by “without exception”?  It means that the plaintiff’s lawyer did not object and did not reserve the right to challenge the nonsuit on appeal.  So the theory of negligence has dropped out of the case.  The appellate court doesn’t need to say anything more about it.


One theory down, one to go.  The second theory is that Dr. McGee breached a contract with Hawkins.


What’s a contract?


-         A contract between two or more individuals?

-         Some things are not a contract.  Some things are just statements of opinion or predictions.


The court said that Dr. McGee’s statements about the “three or four days” were clearly not a contract.  Why?  They are expressions of opinion or predictions.  These don’t amount to a contract, in broad terms.


But…what is a contract?  “A promise that can be enforced by law.”  Check out the Restatement, §1.


A contract is a promise the law will enforce.”


“This course could be called ‘Promises’ instead of ‘Contracts’.”


A promise is a commitment.  X or Y will happen – that’s just an opinion.  There’s no engagement that you can count on X or Y happening.


The weatherman doesn’t promise it will rain tomorrow, the weatherman predicts that it will rain tomorrow.


When doctors talk to patients about the results that they will obtain when a procedure is finished, they will rarely promise a specific result.  To do so would be “dippy”.  If they make such a promise, the law will hold them to it.


Why does this appellate court say that it was right for the trial judge to let the question of contract formation go to the jury?


-         There was a solicitation of the operation.  That’s significant.


What words came out of Dr. McGee’s mouth?  The jury decides this question of fact.  The jury seems to have believed Hawkins over McGee.  This opinion is written on the basis of the facts as the jury saw them.


Some contracts are wholly unwritten.  This was an oral contract.


What about hearsay?  This is something you learn about in evidence.  A quick answer: hearsay is A testifying as to what B says.  We don’t allow hearsay to prove facts, but you can prove what somebody said.


If this were, for example, a negligence case involving a traffic accident and the question is whether the traffic light was red or green, you can’t have A testify that B said it was red.  You have to call B to testify directly.


But that doesn’t hold here.


First question with respect to contraction formation: did Dr. McGee say this?  The jury decided that he did say this.


Did Dr. McGee mean what he said?  Did he have reservations?  Did he mean to promise 100%?  If he says words that can be interpreted as doing that, and Hawkins interprets those words reasonably as making a guarantee, then you have a contract.


There’s often at least some failure of communication involved in these cases, whether the communication is written or oral.  We are going to decide what the words mean based on what interpretation is most reasonable under the circumstances.


When you put it all together, the appellate court finds the trial court was right to let the question of contract formation go to the jury.


To prove a breach of contract, the plaintiff must prove three things:


1.     Must prove contract formation

2.     Must prove breach

3.     Must prove damages


Contract damages


Meaning: intended compensation for a breach.  Compensatory damages – we focus on the party aggrieved by the breach.  We ask the plaintiff, “What injury did you suffer?”  We try to compensate the injury as best we can.  But there are no punitive damages.


We are compensating the plaintiff’s loss.  How do we do that?


There are two approaches: the trial judge’s approach and the appellate court’s approach.  What the trial court do wrong?  It gave incorrect instructions to the jury.


The plaintiff started with a scarred hand.  He burned it on an electric wire.  The idea of the procedure was to correct the scar.  They took skin from his chest and grafted it onto his palm.  It resulted in a hairy palm.  So there was positive harm done by the operation.


What’s the value of a scarred hand minus the value of the hairy hand?  That should be part of the damages, according to the trial court.  Plus, pain and suffering damages should be awarded.


The appellate court says that the major damages should be the value of the 100% hand minus the value of the hairy hand.  Which gives you the most money?  It’s hard to tell, because there’s the difference in pain and suffering.


How do you value a hand?  The value of the hand turns on whose hand it is.  E.g. Tim Couch’s hands are valuable, though not as valuable as a few weeks ago when he was the starter.  Or e.g. concert violinists.  But lawyers don’t have very valuable hands.


What else can you do to determine the value of a hand?  It could be non-professional.  Maybe you’re embarrassed of your bad hand.  You can put a dollar value on it.


It’s relatively easy to say that we’re going to give the difference between what was promised and what was produced, but applying it is considerably more difficult.


When we look at the case tomorrow with bushels of wheat, it will be far easier to compute exactly how much the loss is worth.


Maybe your age can affect the value of your hand.  If you’re young, it’s worth more over the course of your life than if you’re about to die.


Worker’s Comp is a situation where we’ve taken certain matters away from courts and jurists and handled them in a regulatory system.  This is very different than an ordinary tort or contract case.  It has its advantages and disadvantages, but you can find out more in another course.


What interest was the trial court protecting when he came up with the “scar minus hairy” formula?  The trial court was protecting the reliance interest.  If we give him his cash, we’re in large part restoring him to the position he occupied before the contract was made, so far as is possible.


The appellate court is protecting the expectation interest.  This is the standard remedy in contracts.  The idea is to put the plaintiff in the position he/she would have been in if the contract had been carried out.


The expectation interest is the weakest…it has the least “tug on our heartstrings”.  The strongest interest is the restitution interest, where the plaintiff has a “minus” and the defendant has a “plus”.


What is Hawkins’s restitution interest in this case?  It’s the fee that he paid to Dr. McGee.  Hawkins would have a very strong claim.  Example: you go put a down payment on a car.  You come back the next day to pick up the car, and the dealer says you can’t have the car, and you can’t have the down payment back either.  We wouldn’t have much trouble determining that you should get your down payment back.


Reliance interest: it’s a cost that came out of the plaintiff’s pocket but didn’t go into the defendant’s pocket.  It might have gone to a third party, for example, Hawkins’s hospital fees.  With restitution you’re merely taking the benefit away from the defendant that the plaintiff gave him/her.


Expectation interest: this is the value the plaintiff hoped for, but it’s not something that is in the defendant’s pocket.  Why is this the typical remedy in contract enforcement?


Hours last 53 minutes in Contracts.  But most classes will run to 55-56 minutes.  We’ll have to miss a class at some point, but we won’t have to make up classes.


For tomorrow, the assignment is to start on p. 23 and do Acme v. Johnson for tomorrow.


Pick up three things before you leave: the assignment sheet, the six problems, and Harvard Law Record bit about H v. McG.  Interesting stuff that’s not in your casebook.


Keep in mind that every case you read has human beings in tough situations; lawsuits are unfriendly things and don’t occur unless something bad is happening.


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