Select Page

Contracts
SUNY Buffalo Law School
Mensch, Betty

UNIT ONE: REMEDIES

A. EXPECTATION INTEREST (EXPECTANCY)

Hawkins and McGee: The Hairy Hand Case (Text page 3)

Facts: McGee performed hand surgery on Hawkins’ hand and promised that it would be 100% perfect after the operation and healed in 3-4 days.

Procedure: Before jury hears any evidence, suit for negligence is dismissed; all that remains is asumpsit- breach of contract.

Issue:
1. Is there a contract? (Branch looks to two possible bases for K)
· 3-4 day prediction (Branch holds that as a matter of law, a doctor’s opinion is not a contract; commonplace practice is for doctors to give opinions, it is not the nature of medicine to make binding guarantees)
· 100% perfect guarantee- (Branch doesn’t want to decide on these words alone, but looks the context in which this statement was made)
o Words + Inducement suggest that Dr. McGee was soliciting for self- interested purposes; this turns McGee’s behavior away from a paternalistic Dr/Patient relationship and more like a Market Transaction. Therefore, we can treat like a contract made in a self- interesting market exchange.
2. How do we award damages?
· Once deciding the 100% guarantee is a contract, the only thing that governs damages are principle and analogy
· Underlying principle of Contract law- Williston position: Put the plaintiff in as good as a position as they would have been if the contract had been performed (as opposed to tort damages to restore the person to status quo ante; here, the condition of Hawkins’ hand prior to the surgery is irrelevant)
o Look to the value promised as opposed to the value delivered
· Analogy: (because we don’t have many contracts in medical setting) “A hand is like a machine”
o If this were a machine, the damage for failure to provide the machine as promised would be the difference in value between a 100% perfect machine (value promised) and the value of the machine that is delivered (value delivered)
· Pain and suffering drops out of damages calculation because this was implicit in the contract; Pain and suffering was exchanged for a 100% hand

Pain and suffering, $$$

M

H

100% perfect hand

Expectation Interest: The interest of a party in realizing the value of expectancy that was created by the other’s promise. The goal of the contract system is to make sure that the non-breaching party is in as good a position as he would have been if the contract was performed

RULE: Judge Branch uses value promised [value of 100% perfect hand] – value delivered [value of hand after operation] to come up with damages award

Groves v. Wunder (Text pg 12)

Facts: Wunder paid Groves a fee to remove gravel from Groves’ property but Wunder failed to regrade the land according to the contract. Groves is giving Wunder a seven year lease in exchange for no competition and allows him to take whatever sand and gravel he wants in exchange for $105,000 and an agreement to level the soil in the land. Instead it is left rugged and uneven and only the best gravel has been removed. This is clearly a breach, as the contract specified that land was to be regraded.

7 year lease, no competition, use of sand and gravel

ly different. Moreover, this doctrine should come into consideration whenever CoP makes no economic sense. Furthermore, he highlights the fact that the re-grading clause was “incidental” to the REAL contract, which involved the removal of coal, 7 year lease, etc.
· Olsen concedes that there are certain situations where you may get the full CoP; “where the defect is one that can be repaired or cured without undue expense, so as to make the building conform to the agreed plan, then the owner recovers such amount as he has reasonably expended, or will reasonably have to spend, to remedy the defect (Also, Ugly Fountain example- if there had been great subjective value to property, than CoP could be awarded)
· However, if the defect in material or construction is one that cannot be remedied without an expenditure for reconstruction disproportionate to the end to be attained, or without endangering unduly other parts of the building, then the damages will be measured, not by the cost of remedying the defect, but by the difference between the value of the building as it is and what it would have been worth if it had been built in conformity with the contract
Risk allocation considerations- [this is during the depression, when the value of land has plummeted]. The OWNER, not the LESSEE, usually assumes the risk that the land will go from high value to low value;