Takeaway
In short, this case applies expectation damages to a doctor’s enforceable warranty: Hawkins may recover the value of the promised perfect hand minus the value of the hand he received, not compensation for the pain of the operation as such.
Hawkins had suffered a serious electrical burn to his right hand about nine years earlier, leaving substantial scar tissue in his palm. Dr. McGee proposed an operation that would remove the scar tissue and replace it with skin grafted from Hawkins’s chest. Hawkins and his father testified that, in seeking their consent, McGee said he would “guarantee to make the hand a hundred per cent perfect hand” or a “hundred per cent good hand.”
The operation did not produce the promised result. At trial, the jury was instructed that, if Hawkins prevailed, it could award damages for pain and suffering caused by the operation and for injury beyond the condition of his hand before the surgery. The defendant challenged both the submission of the alleged warranty to the jury and the damages instruction. The trial court also treated damages above $500 as excessive. The Supreme Court of New Hampshire ordered a new trial because the jury had been given the wrong measure of contract damages.
Issue #1
Whether the evidence permitted the jury to find that Dr. McGee made an enforceable contractual warranty that Hawkins would have a perfect or good hand.
Holding
Yes. The alleged promise could reasonably be found to be a contractual guarantee rather than merely a physician’s opinion or prediction.
Reasoning
McGee’s statements that Hawkins would leave the hospital in several days and soon return to work were only estimates about the likely duration of treatment and disability. Standing alone, those statements did not create contractual liability when the estimates proved inaccurate.
The alleged statement that McGee would “guarantee” a one-hundred-percent perfect or good hand was different. If made and accepted at face value, those words were sufficient to establish the warranty Hawkins claimed.
Although surgery is inherently uncertain and a surgeon would not ordinarily be understood to guarantee a perfect result, the surrounding circumstances mattered. Evidence that McGee repeatedly solicited the opportunity to perform the operation and may have wanted experience with skin grafting supported an inference that he used the guarantee as an inducement to obtain consent.
Contract formation is judged objectively. If McGee made the stated promise and Hawkins relied on it, McGee’s undisclosed mental reservations about whether he truly intended to guarantee the result would not defeat the contract.
Issue #2
Whether damages for breach of the alleged surgical warranty could include pain and suffering from the operation and separate compensation for any worsening of Hawkins’s hand.
Holding
No. The proper measure is expectation damages: the difference between the value of the promised perfect or good hand and the value of Hawkins’s hand as it actually was after the operation, plus foreseeable incidental losses.
Reasoning
Contract damages aim to place the injured party in as good a position as he would have occupied if the contract had been performed. They are measured by what the promisor should have delivered, not by what the promisee gave up or spent in the transaction.
The court analogized the case to a warranty that a machine will perform in a particular way. Under the ordinary warranty rule, recovery is the difference between the value of the warranted product and its actual value, together with incidental losses that the parties knew or should have known would probably result from breach.
Applied here, the jury should compare the value to Hawkins of the perfect or good hand McGee promised with the value of his hand in its actual condition. The jury may also award incidental consequences that were within the parties’ contemplation when they contracted.
Pain necessarily incident to the surgery was part of the consideration Hawkins agreed to provide in exchange for the promised result. It did not itself measure the value of the promised hand or the shortfall between that promise and the result. Likewise, a worsening of the hand was not a separate damages category, though it could affect the hand’s actual value under the correct expectation-damages calculation.
Because the trial court instructed the jury under an erroneous damages rule and used that same rule in evaluating whether the verdict was excessive, the Supreme Court ordered a new trial.
Issue #3
Whether the trial court properly refused the defendant’s proposed jury instructions concerning the alleged special contract and the possibility of corrective surgery.
Holding
Yes. The proposed instructions were inaccurate, incomplete, or misleading under the evidence.
Reasoning
The defendant’s proposed instruction stating that the only issue was whether there was a special contract to produce a perfect hand improperly ignored the other factual issues raised by the evidence. The trial court therefore properly refused it.
The defendant also sought an instruction requiring the jury to find that both parties subjectively understood McGee to be guaranteeing a perfect result. That formulation was wrong because contractual liability turns on the objective meaning of McGee’s words and Hawkins’s reliance, not on McGee’s unexpressed understanding.
Finally, the defendant sought an instruction that he could not be liable if a further operation could correct Hawkins’s disability. That instruction was improper because McGee had refused to perform another operation, and the evidence could support damages sufficient to cover the cost of corrective treatment.
