[George Hawkins was a young man the palm of whose hand had been badly burned nine years earlier by an electric wire, and which had a severe quantity of scar tissue. Defendant McGee was a surgeon who wanted to experiment with skin grafting, and repeatedly solicited Hawkins and his father to allow him to take skin off Hawkins's chest to graft on the palm. Evidence put on by Hawkins showed that Dr. McGee had said, "I will guarantee to make the hand a hundred per cent perfect hand" or "a hundred per cent good hand." The operation did not go well, with the hand becoming matted with hair and having a restricted range of motion. Hawkins sued, claiming the hand was not as good as he had been promised. The jury found that the physician was not professionally negligent, and so Hawkins could not recover in tort. But the jury found for Hawkins on his claim that McGee had made a warranty and that the warranty was breached.1 The court then turned to the issue of damages.] 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 what injury he has sustained over and above the injury that he had before." To this instruction the defendant seasonably excepted. By it, the jury was permitted to consider two 1 [Note some good lawyering here on behalf of Hawkins. The medical malpractice claim failed because there was no professional negligence by Dr. McGeean unsurprising result given that the skin-grafting surgery was new and experimental at the time. Hawkins's lawyers, however, managed to win the case on a breach of contract theory. Even personal injury lawyers can sometimes benefit from stuff they learn in Contracts class. - Eds.] 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. 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. 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. 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. "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, 18 A. 90, (N.H. 1888). 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. 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 was a legal detriment suffered by him which constituted a part of the consideration given by him for the contract. It represented a part of the price which he was willing to pay for a good hand, but 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 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. Review Question 1. Make note of the legal standard used by the Hawkins v. McGee court. How does it square with the way things are phrased in sections 347-348 of the Restatement (Second) of Contracts? Are the rules different, or are they basically the same as what the Hawkins court describes?

Review Question 2. How much more is a perfect hand worth than a hairy hand, and how would one calculate that? At one point in Hawkins, the court describes the case as "closely analogous to one in which a machine is built for a certain purpose and warranted to do certain work." If the seller of a machine breached a warranty of its quality, how would the buyer's damages be calculated? Consult UCC 2-714 in answering this last question.

Review Question 4. Parties frequently enter into contracts with a profit motive, hoping to end up richer than before as a result of the contract. Indeed, the law of contracts greatly facilitates such business dealings. If you were a judge, what rule would you articulate as to what kind of enrichment is "unjust" rather than socially-beneficial profit seeking?