Hawkins v. McGee, 84 N.H. 114, 146 A. 641 (1929), is a contract law case known to law students as the "Case of the Hairy Hand." It is famous for its mention in the movie and novel "The Paper Chase" and is frequently taught in law school contracts courses.
The question before the court was how to measure damages in a medical malpractice case brought under a breach of contract theory. The court defined that measure to be "expectation damages": the difference in value between the post-operative hand and the perfect hand promised by the physician.
Under Hawkins v. McGee, if a physician guarantees a perfect hand following an attempted skin graft operation but provides a poorly functioning hand that sprouts hair from the palm, the plaintiff is entitled to be awarded the difference in value between the hand promised and the hand provided, plus incidental damages. The plaintiff is not entitled to recover for pain and suffering or impairment.
Facts of Hawkins v. McGee
When he was 11 years old, George Hawkins burned his right hand on an electric wire after turning on a light in his home. Edward R. B. McGee, a Berlin, New Hampshire physician, approached Charles Hawkins, George's father, about using a skin grafting procedure he hadn't done before to repair George's hand. Dr. McGee proposed taking skin from George's chest and using it to replace the scar tissue on his hand. He guaranteed George a "one hundred percent good hand." On George's behalf, Charles agreed to the procedure.
Dr. McGee performed what turned out to be a painful surgery, and George had a longer recovery time than expected. Not only did Dr. McGee fail to fix the hand, but George also grew thick hair on his palm from the graft taken from his chest.
Hawkins sued Dr. McGee for negligence and breach of contract (assumpsit). The trial court dismissed the negligence claim but let the contract claim proceed to trial. Over the defendant's objection, the trial court instructed the jury that if it found that the defendant breached his warranty, it could award damages for the plaintiff's pain and suffering and for impairment.
The jury returned a verdict for the plaintiff and awarded $3,000. Finding the award excessive, the trial court ordered that the verdict be set aside unless the plaintiff agreed to reduce it to $500. The plaintiff refused. The trial court set aside the verdict, and the plaintiff appealed. On appeal, the defendant contested the finding of an enforceable contract.
Supreme Court of New Hampshire
Before the court were two central issues:
- Did the defendant, by guaranteeing a "one hundred percent good hand," made a legally enforceable promise to the plaintiff that, if accepted, create a contract?
- If so, would the proper measure of damages for breach of that contract include pain and suffering and damage to the hand?
The defendant argued that no reasonable person would interpret his statement as an offer. Reasonable people recognize that surgeries come with risks and that the result of the operation, no matter the physician's expressed conviction, is never certain. Poor outcomes are always a possibility. Defendant's promise to give George a "one hundred percent good hand" was not an offer that, even if accepted, could form an enforceable contract.
The New Hampshire Supreme Court disagreed. The court pointed out that the question of how a reasonable person would construe a statement was one for the jury. It only became a question for the court if no reasonable person could construe it otherwise. The court pointed out that the evidence at trial showed that the defendant had actively solicited the plaintiff to perform the surgery despite having virtually no skin grafting experience. This evidence supported the jury's conclusion that the defendant's statement should be taken at face value.
Measure of Damages
Having found the existence of a valid contract, the court turned to the proper measure of damages for its breach. The trial court had instructed the jury to award damages for the plaintiff's pain and suffering and for the harm done to George's hand by the surgery; in other words, tort damages.
The New Hampshire Supreme Court held that this instruction was wrong. The court pointed out that under the law of contracts, damages are measured by the terms of the contract. The purpose of the law is to put a plaintiff in the position they would be if the defendant not breached the contract.
Although the case was novel, the court analogized it to one in which someone promised to make a machine that could do specific work. If that person failed to provide the promised machine, the aggrieved party could recover the difference in value between what they were promised and what they actually got (expectation damages) plus incidental damages that the parties knew, or should have known, might result from the breach.
The court decided that this measure of recovery should apply to George's case. Reasoning that expectation damages — the difference in value between a perfect hand and the hand George got — would best fulfill the purpose of contract damages, the court concluded that the jury instruction was erroneous and remanded the case for a new trial.
Rule of Law
The proper measure of damages in a breach of contract case against a physician that fails to provide a guaranteed surgical result is the difference in value between what was provided and what was promised (expectation damages).
After Hawkins v. McGee was decided, the parties reached a settlement of $1,400. Dr. McGee then filed a claim with United States Fidelity and Guaranty Co., his malpractice carrier. The carrier denied coverage on the ground that the claim against the policy wasn't based on the doctor's negligence but instead was based on a breach of contract.
Dr. McGee sued his carrier. At trial, the court entered a directed verdict on behalf o the carrier. Dr. McGee appealed. In McGee v. United States Fidelity and Guaranty Co., 53 F.2d 953 (1st Cir. 1931), the U.S. Court of Appeals for the First Circuit affirmed the judgment, ruling that the malpractice policy covered the doctor's "malpractice, error, or mistake" — negligence — but not his breach of a contract.