Four (Often Odd) Historical Contract Cases Lawyers Still Study

While reading about the elements required to form an enforceable contract might appear a bit dry to some, the history of contract law has all sorts of entertaining and interesting stories. Many of today’s contract rules were developed over hundreds of years by judges in the cases they decided. And it is the facts of these cases that can be memorable. In this article, we’ll discuss a few of these historical contract cases which are often still studied by today’s law students.

Always Have a Backup Crankshaft for Your Mill

In Hadley v Baxendale, 9 Exch. 341, 156 Eng.Rep. 145 (Court of Exchequer, 1854), the plaintiffs operated a mill in Gloucester, England. One day a crankshaft in a steam engine broke, causing the busy mill to grind to a halt. The plaintiffs had to send the shaft to Greenwich so it could be used as a model for constructing a replacement. After defendants, who operated as Pickford & Co., represented that they could deliver the shaft to Greenwich the next day, plaintiffs hired them and paid 2 pounds, 4 shillings. It actually took defendants several days to make the delivery. During this time, the plaintiffs couldn’t run their mill. The plaintiffs sued for breach of contract, including lost profits. The jury awarded more than 25 pounds and the defendants appealed.

The Court awarded the defendants a new trial, holding that the plaintiff could not recover lost profits because they were not a reasonably foreseeable consequence of the breach of the contract at the time it was formed. In today's contract law courts, this rule still has applicability when considering what damages can be recovered for the breach of a contract.

What Is the Value of a Hand with Chest Skin?

In surely one of the most bizarre contract cases in the history of contract law, Hawkins v. McGee, 146 A. 641 (New Hampshire Supreme Court 1929), the plaintiff had scar tissue on the palm of his right hand. He went to a surgeon, who allegedly stated: “I will guarantee to make the hand a hundred percent perfect hand or a hundred percent good hand.”

The surgeon grafted skin from the plaintiff’s chest onto his hand. Apparently, things didn’t go well and the plaintiff sued for breach of the doctor’s promise. The Court found the jury could indeed find this evidence sufficient for the creation of a contract. The measure of damages would be the difference between the value to plaintiff of a “perfect hand” or a “good hand” and the value of his hand in its present condition.

Can You Sell Your Farm on a Guest Check in a Restaurant?

In Lucy v. Zehmer, 196 Va. 493 (1954), the Lucys sued the Zehmers for specific performance of an alleged contract in which the Zehmers agreed to sell their farm, located in Dinwiddie County, Virginia. The parties wrote the following, and signed it: "We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000.00, title satisfactory to buyer."

However, Mr. Zehmer later contended that before the signing of the contract, he and Mr. Lucy had consumed several alcoholic drinks, that he had believed the offer was made in jest, and that he had accepted it as a joke. He further stated that once he realized Mr. Lucy was serious, he told him he had no intention of selling the farm.

The Virginia Supreme Court found that an enforceable contract existed. While Mr. Zehmer alleged he had been joking, the evidence demonstrated that Mr. Lucy believed that the parties had engaged in a serious business transaction, and that his belief was warranted. The Court held that the law examines how a reasonable person would construe the words and actions at issue, not a person’s unexpressed state of mind. So, if you joke about entering into a contract, you better make the joke clear!

What Shall We Do with a Sickly Sailor?

In Mills v. Wyman, 3 Pick. 207 (Mass. Supreme Court 1825), 25-year-old Levi Wyman became ill during a sea voyage home from a foreign country. When he reached Massachusetts, the plaintiff, acting as a good Samaritan, took care of him until he died. Levi’s father had not requested the plaintiff’s services, but when he learned of them he wrote a letter to the plaintiff and promised to repay the plaintiff’s expenses. When the father failed to pay, the plaintiff sued.

Ruling in favor of the father, the court found that the father’s promise was a moral obligation, but that any alleged agreement lacked consideration, the mutual bargaining process crucial for a contract. Therefore, no contract existed. If it makes the plaintiff feel any better, the court did call the father’s conduct “disgraceful.”

We acknowledge that not everyone shares our affinity for the history of contract law, especially those decided in a court called “Exchequer,” because, frankly, the name sounds really cool. But when it comes to modern-day contract management, there is nothing more valuable than ContractSafe. Whether you’re in real estate, the medical industry, manufacturing, or anything in between, our easy-to-use, technologically advanced contract management solutions can’t be beat. Start your free trial today.