Hawkins v. McGee
146 A. 641 (N.H. 1929)
Branch, J.
1. The operation in question consisted in the removal of a considerable quantity of scar tissue from the palm of the plaintiff’s right hand and the grafting of skin taken from the plaintiff’s chest in place thereof. The scar tissue was the result of a severe burn caused by contact with an electric wire, which the plaintiff received about nine years before the time of the transactions here involved. There was evidence to the effect that before the operation was performed the plaintiff and his father went to the defendant’s office, and that the defendant, in answer to the question, “How long will the boy be in the hospital?” replied, “Three or four days, not over four; then the boy can go home and it will be just a few days when he will go back to work with a good hand.” Clearly this and other testimony to the same effect would not justify a finding that the doctor contracted to complete the hospital treatment in three or four days or that the plaintiff would be able to go back to work within a few days thereafter. The above statements could only be construed as expressions of opinion or predictions as to the probable duration of the treatment and plaintiff’s resulting disability, and the fact that these estimates were exceeded would impose no contractual liability upon the defendant. The only substantial basis for the plaintiff’s claim is the testimony that the defendant also said before the operation was decided upon, “I will guarantee to make the hand a hundred percent perfect hand or a hundred percent good hand.” The plaintiff was present when these words were alleged to have been spoken, and, if they are to be taken at their face value, it seems obvious that proof of their utterance would establish the giving of a warranty in accordance with his contention.
The defendant argues, however, that, even if these words were uttered by him, no reasonable man would understand that they were used with the intention of entering “into any contractual relation whatever,” and that they could reasonably be understood only “as his expression in strong language that he believed and expected that as a result of the operation he would give the plaintiff a very good hand.” It may be conceded, as the defendant contends, that, before the question of the making of a contract should be submitted to a jury, there is a preliminary question of law for the trial court to pass upon, i.e. “whether the words could possibly have the meaning imputed to them by the party who founds his case upon a certain interpretation,” but it cannot be held that the trial court decided this question erroneously in the present case. It is unnecessary to determine at this time whether the argument of the defendant, based upon “common knowledge of the uncertainty which attends all surgical operations,” and the improbability that a surgeon would ever contract to make a damaged part of the human body “one hundred percent perfect,” would, in the absence of countervailing considerations, be regarded as conclusive, for there were other factors in the present case which tended to support the contention of the plaintiff. There was evidence that the defendant repeatedly solicited from the plaintiff’s father the opportunity to perform this operation, and the theory was advanced by plaintiff’s counsel in cross-examination of defendant that he sought an opportunity to “experiment on skin grafting,” in which he had had little previous experience. If the jury accepted this part of plaintiff’s contention, there would be a reasonable basis for the further conclusion that, if defendant spoke the words attributed to him, he did so with the intention that they should be accepted at their face value, as an inducement for the granting of consent to the operation by the plaintiff and his father, and there was ample evidence that they were so accepted by them. The question of the making of the alleged contract was properly submitted to the jury.
2. The substance of the charge to the jury on the question of damages appears in the following quotation: “If you find the plaintiff entitled to anything, he is entitled to recover for what pain and suffering he has been made to endure and for what injury he has sustained over and above what injury he had before.” To this instruction the defendant seasonably excepted. By it, the jury was permitted to consider two elements of damage: (1) Pain and suffering due to the operation, and (2) positive ill effects of the operation upon the plaintiff’s hand. Authority for any specific rule of damages in cases of this kind seems to be lacking, but, when tested by general principle and by analogy, it appears that the foregoing instruction was erroneous.<
“By ‘damages,’ as that term is used in the law of contracts, is intended compensation for a breach, measured in the terms of the contract.” . . . The purpose of the law is “to put the plaintiff in as good a position as he would have been in had the defendant kept his contract.” 3 Williston Cont. § 1338; Hardie-Tynes Mfg. Co. v. Easton Cotton Oil Co., 150 N. C. 150, 63 S. E. 676, 134 Am. St. Rep. 899.
Question
Suppose Smith sells Jones a printer. Smith warrants the printer will print 30 pages a minute; however, the printer can only print 15 pages a minute. As a result, Jones incurs $100 in business losses. To put Jones in as good a position as he or she would have been in had the printer performed as promised, one must give Jones
(a) the difference in value between a 30-page-a-minute printer and a 15-page-a-minute printer.
(b) the difference in value between a 30-page-a-minute printer and a 15-page-a-minute printer plus the $100 in business losses.
Answer A
Incorrect. To put Jones in as good a position as he would have been had the printer performed as promised, we have to give the difference in value between a 30-page-a-minute printer and a 15-page-a-minute printer and the $100 in business losses.
Answer B
Correct. To put Jones in as good a position as he would have been had the printer performed as promised, we have to give the difference in value between a 30-page-a-minute printer and a 15-page-a-minute printer and the $100 in business losses.
The measure of recovery “is based upon what the defendant should have given the plaintiff, not what the plaintiff has given the defendant or otherwise expended.” 3 Williston Cont. § 1341. “The only losses that can be said fairly to come within the terms of a contract are such as the parties must have had in mind when the contract was made, or such as they either knew or ought to have known would probably result from a failure to comply with its terms.” Davis v. New England Cotton Yarn Co., 77 N. H. 403, 404, 92 A. 732, 733, Hurd v. Dunsmore, 63 N. H.
The present case is closely analogous to one in which a machine is built for a certain purpose and warranted to do certain work. In such cases, the usual rule of damages for breach of warranty in the sale of chattels is applied, and it is held that the measure of damages is the difference between the value of the machine, if it had corresponded with the warranty and its actual value, together with such incidental losses as the parties knew, or ought to have known, would probably result from a failure to comply with its terms. . . .
Question
In the earlier hypothetical concerning Smith, Jones, and the printer, suppose Jones’ $100 in business loses could not “be reasonably anticipated by the parties as likely to be caused by” the failure of the printer to print 30 pages a minute; then, under the rule just stated, the court would not award the $100 to Jones.
(a) True
Correct. The court will award Jones the $100 only if that loss could reasonably be anticipated as the likely result of the failure of the printer to print 30 pages a minute.
The requirement is often put this way: the plaintiff may recover only those loses which were reasonably foreseeable at the time of contracting as the probable result of a breach. Hadley v. Baxendale focuses on this requirement.
(b) False
Incorrect. The court will award Jones the $100 only if that loss could reasonably be anticipated as the likely result of the failure of the printer to print 30 pages a minute.
The requirement is often put this way: the plaintiff may recover only those loses which were reasonably foreseeable at the time of contracting as the probable result of a breach.
The rule thus applied is well settled in this state. “As a general rule, the measure of the vendee’s damages is the difference between the value of the goods as they would have been if the warranty as to quality had been true, and the actual value at the time of the sale, including gains prevented and losses sustained, and such other damages as could be reasonably anticipated by the parties as likely to be caused by the vendor’s failure to keep his agreement, and could not by reasonable care on the part of the vendee have been avoided.” Union Bank v. Blanchard, 65 N. H. 21, 23, 18 A. 90, 91; Hurd v. Dunsmore, supra; Noyes v. Blodgett, 58 N. H. 502; P. L. ch. 166, § 69, subd. 7.
Question
Suppose Jones could by “reasonable care” have avoided the $100 in business loses; then, under the rule just stated, the court would not award the $100 to Jones.
(a) True.
Correct. If Jones can reasonably avoid the $100, the court will not award it to him.
This requirement is called avoidability or mitigation. Rockingham County v. Luten Bridge focuses on this requirement.
(b) False.
Incorrect. If Jones can reasonably avoid the $100, the court will not award it to him.
This requirement is called avoidability or mitigation. Rockingham County v. Luten Bridge focuses on this requirement.
We therefore conclude that the true measure of the plaintiff’s damage in the present case is the difference between the value to him of a perfect hand or a good hand, such as the jury found the defendant promised him, and the value of his hand in its present condition, including any incidental consequences fairly within the contemplation of the parties when they made their contract. 1 Sutherland, Damages (4th Ed.) § 92. Damages not thus limited, although naturally resulting, are not to be given.
The extent of the plaintiff’s suffering does not measure this difference in value. The pain necessarily incident to a serious surgical operation was a part of the contribution which the plaintiff was willing to make to his joint undertaking with the defendant to produce a good hand. . . . it furnished no test of the value of a good hand or the difference between the value of the hand which the defendant promised and the one which resulted from the operation.
It was also erroneous and misleading to submit to the jury as a separate element of damage any change for the worse in the condition of the plaintiff’s hand resulting from the operation, although this error was probably more prejudicial to the plaintiff than to the defendant. Any such ill effect of the operation would be included under the true rule of damages set forth above, but damages might properly be assessed for the defendant’s failure to improve the condition of the hand, even if there were no evidence that its condition was made worse as a result of the operation.
Question
It would over-compensate the plaintiff to award him for the difference in value between the promised hand and the hand actually produced plus compensation for the pain and suffering since the plaintiff would better off than he would have been had the operation produced the promised hand.
Would it also over-compensate the plaintiff to compensate him for the difference in value between the promised hand and the hand actually produced and return the fee he paid for the operation?
(a) Yes.
Correct. Compensating for the difference in value between the promised hand and the hand actually produced puts the plaintiff in as good a position as he would have been had the operation resulted in the promised hand. Returning the fee as well would put him in a better position.
(b) No.
Incorrect. Compensating for the difference in value between the promised hand and the hand actually produced puts the plaintiff in as good a position as he would have been had the operation resulted the promised hand. Returning the fee as well would put him in a better position.
It must be assumed that the trial court, in setting aside the verdict, undertook to apply the same rule of damages which he had previously given to the jury, and, since this rule was erroneous, it is unnecessary for us to consider whether there was any evidence to justify his finding that all damages awarded by the jury above $500 were excessive.
New trial.
MARBLE, J., did not sit; the others concurred
Notes and Questions
(1) The damage rule the Hawkins court uses is called the expectation measure of damages. There are other damages measures the courts sometimes use, but the expectation measure is by far the preferred measure.
(2)
Question
The Chapel Bells, a band, contracted with McBride to provide music for her wedding reception. The Bells were to play from 8:00 pm to midnight for a price of $10,000. The Bells showed up at 10pm and played to Midnight.
McBride’s expectation damages are:
(a) $50,000, the total cost of her wedding reception.
(b) the difference in value between a wedding reception with music by the Bells from 8pm to Midnight and a wedding with music by the Bells from 10pm to Midnight.
(c) $5,000–half of the price for the performance by the Bells.
$50,000
Incorrect. The following three-step routine is a good way to calculate expectation damages. Work through it to see why McBride does not get the total cost of the wedding reception.
First, the contract-performed position: Figure out the position the position the injured party would have been in if the contract had been performed as promised.
For McBride, this is a wedding reception with music by the Bells from 8 pm to 12 am.
Second, the result-of-the-breach position: Figure out the losses imposed on the injured party as a result of the breach. Note: the “result of the breach” requirement: all the losses must be caused by the breach.
For McBride, this is a wedding reception without music by the Bells from 8 pm to 10 pm.
Third, the award: award the difference in value between the contract-performed position and the result-of-the-breach position.
For McBride: the difference in value between a wedding reception with music by the Bells from 8pm to Midnight and a wedding with music by the Bells from 10pm to Midnight.
For McBride to get the total cost of the wedding reception in damages, the above difference in value would have to equal the total cost of the reception. Even if one values wedding reception with music by the Bells from 8pm to Midnight at the total cost of the reception, one would still subtract the value of a wedding with music by the Bells from 10pm to Midnight.
Difference in value
Correct. The following three-step routine is a good way to calculate expectation damages.
First, the contract-performed position: Figure out the position the position the injured party would have been in if the contract had been performed as promised.
For McBride, this is a wedding reception with music by the Bells from 8 pm to 12 am.
Second, the result-of-the-breach position: Figure out the losses imposed on the injured party as a result of the breach. Note: the “result of the breach” requirement: all the losses must be caused by the breach.
For McBride, this is a wedding reception without music by the Bells from 8 pm to 10 pm.
Third, the award: award the difference in value between the contract-performed position and the result-of-the-breach position.
For McBride: the difference in value between a wedding reception with music by the Bells from 8pm to Midnight and a wedding with music by the Bells from 10pm to Midnight.
$5,000
Incorrect. The following three-step routine is a good way to calculate expectation damages. Work through it to see why McBride does not get the total cost of the wedding reception.
First, the contract-performed position: Figure out the position the position the injured party would have been in if the contract had been performed as promised.
For McBride, this is a wedding reception with music by the Bells from 8 pm to 12 am.
Second, the result-of-the-breach position: Figure out the losses imposed on the injured party as a result of the breach. Note: the “result of the breach” requirement: all the losses must be caused by the breach.
For McBride, this is a wedding reception without music by the Bells from 8 pm to 10 pm.
Third, the award: award the difference in value between the contract-performed position and the result-of-the-breach position.
For McBride: the difference in value between a wedding reception with music by the Bells from 8pm to Midnight and a wedding with music by the Bells from 10pm to Midnight.
For McBride to get the total cost of the wedding reception in damages, the above difference in value would have to equal the total cost of the reception. Even if one values wedding reception with music by the Bells from 8pm to Midnight at the total cost of the reception, one would still subtract the value of a wedding with music by the Bells from 10pm to Midnight.
(3)
Question
Smith contracts with Jones for Jones to build Smith a house for which Smith promises to pay $1,000,000. Jones breaches the contract by building a defective house with a market value of $750,000. Had the house been built as promised, it would have had a market value of $1,000,000. Using the market values to calculate the expectation damages, Smith’s expectation damages are:
(a) $250,000.
Correct. Working through the three-step process leads to this conclusion.
First, the contract-performed position: Figure out the position the position the injured party would have been in if the contract had been performed as promised.
In this case, Smith would have a house with a market value of $1,000,000.
Second, the result-of-the-breach position: Figure out the losses imposed on the injured party as a result of the breach. Note: the “result of the breach” requirement: all the losses must be caused by the breach.
The loss caused by the breach is that Smith has a house with a market value of $750,000.
Third, the award: award the difference in value between the contract-performed position and the result-of-the-breach position.
The difference is $250,000.
(b) $1,000,000.
Incorrect. Working through the three-step process leads to right result.
First, the contract-performed position: Figure out the position the position the injured party would have been in if the contract had been performed as promised.
In this case, Smith would have a house with a market value of $1,000,000.
Second, the result-of-the-breach position: Figure out the losses imposed on the injured party as a result of the breach. Note: the “result of the breach” requirement: all the losses must be caused by the breach.
The loss caused by the breach is that Smith has a house with a market value of $750,000.
Third, the award: award the difference in value between the contract-performed position and the result-of-the-breach position.
The difference is $250,000.
(c) $750,000.
Incorrect. Working through the three-step process leads to right result.
First, the contract-performed position: Figure out the position the position the injured party would have been in if the contract had been performed as promised.
In this case, Smith would have a house with a market value of $1,000,000.
Second, the result-of-the-breach position: Figure out the losses imposed on the injured party as a result of the breach. Note: the “result of the breach” requirement: all the losses must be caused by the breach.
The loss caused by the breach is that Smith has a house with a market value of $750,000.
Third, the award: award the difference in value between the contract-performed position and the result-of-the-breach position.
The difference is $250,000.
(4)
Question
The facts are the same as in (3) with the following addition. Smith has paid only $500,000 of the promised $100,000. He takes possession of the house and refuses to pay Smith any more money.
(a) $250,000.
Correct. The calculation of the expectation damages does not change. The same three-step procedure leads to the same result. Thus:
First, the contract-performed position: Smith would have a house with a market value of $1,000,000.
Second, the result-of-the-breach position: Smith has a house with a market value of $750,000.
Third, the award: The difference is $250,000.
This seems over-compensatory because Smith has paid only $500,000 and ends up with a house worth $750,000 plus a damage award of $250,000. A total of $1,000,000 for a cost of only $500,000!
But: the failure to pay the full contract price is a breach of contract by Smith. Jones can–and almost certainly will–sue for breach of contract, and Jones expectation damages will get the paid contract price–$500,000–in damages from Smith. Smith ends up paying $1,000,000 for a market value of $1,000,000. This is exactly the situation Smith would have been in if the contract had been performed as promised.
(b) $0.
Incorrect. The calculation of the expectation damages does not change. The same three-step procedure leads to the same result. Thus:
First, the contract-performed position: Smith would have a house with a market value of $1,000,000.
Second, the result-of-the-breach position: Smith has a house with a market value of $750,000.
Third, the award: The difference is $250,000.
This seems over-compensatory because Smith has paid only $500,000 and ends up with a house worth $750,000 plus a damage award of $250,000. A total of $1,000,000 for a cost of only $500,000!
But: the failure to pay the full contract price is a breach of contract by Smith. Jones can–and almost certainly will–sue for breach of contract, and Jones expectation damages will get the paid contract price–$500,000–in damages from Smith. Smith ends up paying $1,000,000 for a market value of $1,000,000. This is exactly the situation Smith would have been in if the contract had been performed as promised.