Hypo for you Contracts Wizards

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burtonrideclub
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Hypo for you Contracts Wizards

Postby burtonrideclub » Sat Dec 04, 2010 4:26 pm

If anyone can help me figure out this hypo from an old practice test, you are awesome. I'll just summarize it.

The contract was for sale of organs to a hospital (which statutes for the state hold organs are NOT goods, but a service). The seller handed over a contract with an EXPRESS exclusion against all express or implied warranties, and included langauge against warranties of merchantability and fitness.

When the sales rep handed the contract to the hospital rep, the hospital rep crossed out the warranty and said "you know we can't accept the term, we tell you that every time but your form always includes it."

The sales rep replied "ill let the home office know", thanked the hospital for the business and left.

Shockingly, the organ contained some disease, patient got sick, sued the hospital yada yada yada. Organ was worth 100 bucks, they are being sued for a million in damages.

What rights do they have against the organ company. The warranty exclusion seems pretty solid. How can you argue out of it.

Thanks for the help.

Renzo
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Re: Hypo for you Contracts Wizards

Postby Renzo » Sat Dec 04, 2010 4:37 pm

I think there might be too much summary here, because I feel like some info must be missing.

But, you have conclusively stated that this is not a sale of goods, so there never were any implied warranties. Therefore, any warranty that exists must be in the agreement.

The agreement appears to be silent as it is written as to indemnification/allocation of risk, so we have to figure out if the writing is completely integrated, or if the contemporaneous modification of the writing (crossing out the warranty language) created additional contract terms. If it's integrated, the liability lies wherever tort law places it because the parties were silent. If the oral modification at the time of signing is intended as part of the K, the court must determine what that modification was intended to achieve--specifically, was it intended to create a promise of indemnification for bad organs.

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burtonrideclub
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Re: Hypo for you Contracts Wizards

Postby burtonrideclub » Sat Dec 04, 2010 4:41 pm

Sorry let me add to the warranty exclusion. In caps after disclaiming all warranties it said

BIOTECH SHALL NOT BE LIABLE FOR ANY INCIDENTAL, EXEMPLARY, PUNITIVE, DIRECT, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF FAILURE TO MAKE USE OF THIS PRODUCT


That was probably a dumb thing to leave out. Love the avatar by the way.

ogurty
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Re: Hypo for you Contracts Wizards

Postby ogurty » Sat Dec 04, 2010 5:08 pm

Seems like crossing out the term in the presence of the counter-party, under the mirror image rule, constituted a counter-offer, and by leaving the organ with the hospital and not seasonably objecting to the changed term, the organ company assented to the counter-offer by conduct. I don't think you can say the hospital assented to the no consequential damages term under the mirror image rule.

Even if the writing was a memorialization of the previous K, I think you have a case for modification by mutual assent with the seller's agent listening and not objecting. Course of dealing ("we tell you that every time") shows that both parties intended for the warranty clauses of the pre-printed form were not part of the contract. At least the constant objection of the hospital followed by the silence of the seller should constitute a waiver of seller's right to enforcement.

Any way you slice it, a court will be loathe to enforce an agreement the hospital didn't believe it was assenting to, where the seller regularly ignored their complaints and allowed them to believe that the clause was unenforceable. I think the hospital gets consequential damages here.

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swc65
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Re: Hypo for you Contracts Wizards

Postby swc65 » Sat Dec 04, 2010 5:18 pm

^^

I dunno. Maybe the hospital crossing out the clause was not a counter offer, but merely a rejection. If it was a rejection and not a counter offer and the parties acted as if they had a K, then a court might say that the last offer was the K with the clause. If that was the last offer, then the clause would be enforceable according the last shot rule.

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Re: Hypo for you Contracts Wizards

Postby Renzo » Sat Dec 04, 2010 6:48 pm

Since this is not a UCC transaction you have basically three choices: 1) the common law mirror-image/last shot rule applies, and the last terms discussed govern 2) the hospital's change was a counter-offer and was accepted by the organ service under Restatement 59, or 3) you can argue (and probably lose) that Restatement 61 applies and the hospital's crossing out the language for a request for change of terms (not a counteroffer), and since acceptance was not explicitly conditioned on the new terms, the don't apply. 1 and 2 are both tenable, 3 is a stinker of an argument because the conversation seems to me to indicate that the organs will not be accepted with that clause.

You could also throw a little sauce on your answer and say the court could look to past dealings to see of the hospital really always does reject those terms; if they do, it strengthens the hospital's position.

Zindras
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Re: Hypo for you Contracts Wizards

Postby Zindras » Sat Dec 04, 2010 7:38 pm

I think this is an unconscionability issue. Does anyone remember the case where the man bought a car from a salesman, who used a form contract he received from the car company, that had a very similar clause as in this case? The steering wheel was defective and the car veered off the road. The court held the clause unconscionable.

The facts seem very similar though I don't remember if the court used the UCC (might have been too early for that).

Edit: Henningsen v. Bloomfield Motors, Inc..

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swc65
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Re: Hypo for you Contracts Wizards

Postby swc65 » Sat Dec 04, 2010 7:48 pm

Zindras wrote:I think this is an unconscionability issue. Does anyone remember the case where the man bought a car from a salesman, who used a form contract he received from the car company, that had a very similar clause as in this case? The steering wheel was defective and the car veered off the road. The court held the clause unconscionable.

The facts seem very similar though I don't remember if the court used the UCC (might have been too early for that).

Edit: Henningsen v. Bloomfield Motors, Inc..


Good point,but I think that case is too easily distinguishable. The terms were in really small print and below the signature line, the buyer did not know the terms were in there, the clause was written so that an average person would not know that Chrysler was disclaiming personal injury, and the buyer was not a business person and much less sophisticated than the seller. Here the buyer knew the terms were in the K, they were in all caps, the were business people, and the terms were easily understandable.

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Re: Hypo for you Contracts Wizards

Postby Zindras » Sat Dec 04, 2010 7:53 pm

swc65 wrote:
Zindras wrote:I think this is an unconscionability issue. Does anyone remember the case where the man bought a car from a salesman, who used a form contract he received from the car company, that had a very similar clause as in this case? The steering wheel was defective and the car veered off the road. The court held the clause unconscionable.

The facts seem very similar though I don't remember if the court used the UCC (might have been too early for that).

Edit: Henningsen v. Bloomfield Motors, Inc..


Good point,but I think that case is too easily distinguishable. The terms were in really small print and below the signature line, the buyer did not know the terms were in there, the clause was written so that an average person would not know that Chrysler was disclaiming personal injury, and the buyer was not a business person and much less sophisticated than the seller. Here the buyer knew the terms were in the K, they were in all caps, the were business people, and the terms were easily understandable.


Yep, and he should write exactly those words on his practice exam, along with the opposing arguments :).

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swc65
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Re: Hypo for you Contracts Wizards

Postby swc65 » Sat Dec 04, 2010 8:08 pm

Zindras wrote:
swc65 wrote:
Zindras wrote:I think this is an unconscionability issue. Does anyone remember the case where the man bought a car from a salesman, who used a form contract he received from the car company, that had a very similar clause as in this case? The steering wheel was defective and the car veered off the road. The court held the clause unconscionable.

The facts seem very similar though I don't remember if the court used the UCC (might have been too early for that).

Edit: Henningsen v. Bloomfield Motors, Inc..


Good point,but I think that case is too easily distinguishable. The terms were in really small print and below the signature line, the buyer did not know the terms were in there, the clause was written so that an average person would not know that Chrysler was disclaiming personal injury, and the buyer was not a business person and much less sophisticated than the seller. Here the buyer knew the terms were in the K, they were in all caps, the were business people, and the terms were easily understandable.


Yep, and he should write exactly those words on his practice exam, along with the opposing arguments :).


Well part of what is being tested is the ability to distinguish between important and unimportant issues/arguments. You always CAN make an unconscionability argument, but if it is so clearly not that type of case is it worth the time/space? And, some professors might deduct points for making an argument if the facts do not implicate that argument.

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Grizz
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Re: Hypo for you Contracts Wizards

Postby Grizz » Sat Dec 04, 2010 8:18 pm

I think it's easier to make a mutual assent argument than an unconscionability one. I basically agree with Renzo's 2nd post.

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Re: Hypo for you Contracts Wizards

Postby the lantern » Sun Dec 05, 2010 2:45 am

I'm confused here. Why would the hospital get consequential damages (I figured the best they could hope for is reimbursement & possibly lost profits)? Is there some sort of indemnity here (company provided defective organ to hospital, hospital put defective organ in person, person dies, estate sues hospital who then sues the company for indemnity)?

Contracts is my last final so I haven't really started reviewing hardcore for it yet-- this question just really confused me regarding damages.

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vanwinkle
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Re: Hypo for you Contracts Wizards

Postby vanwinkle » Sun Dec 05, 2010 2:59 am

Um. Am I the only one seeing the obvious thing that should be Issue #1 addressed on the exam?

This contract should be unenforceable anywhere in the country. Regardless of whether the transaction is defined as a good or service, a sale of human organs will be void in the courts for public policy reasons. You can sell plasma, but not organs.

I'd agree that you should do the remaining analysis after hitting that point, in case the court does decide to entertain the contract, but this has to be the reason the hypo is about organ transplants. The prof wants to see how many students catch that and address both the public policy problem and the underlying contract. If you just say it's void for public policy and stop there, or if you just jump straight into the contract terms, you're not getting an A.

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Re: Hypo for you Contracts Wizards

Postby Total Litigator » Sun Dec 05, 2010 3:14 am

Dang, I'm a upset the Hammer beat me to it, but really phsyched that I'm thinking on the same level as a Harvard law student lol. This is plainly a policy based question.

You hardly have to be a contract wizard to answer this one. In fact, you probably don't even have to attend law school at all!

If you were to look at the leading liability waiver cases, the ones which declared certain waiver policies as void were all decided on the basis of what runs contrary to public policy. And those cases didn't even involve the buying and selling of organs!

You prof is looking for a policy arguement. You could probably address the pertinent black letter law in a couple sentences.

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Re: Hypo for you Contracts Wizards

Postby Total Litigator » Sun Dec 05, 2010 3:25 am

And by the way, the short answer is "HOSPITALS CAN'T PUT A LIABILITY WAIVER ON ORGANS, THIS ISN'T IT BREAKS YOU BUY, THIS IS IT BREAKS YOU DIE."
For so many reasons... 3 off the top of my head... Think about the bargaining position of the "buyer" contracting away their rights. They need the organ or they'll die. Think about the supply and demand and who has control, the hospital owns the market for organs and supply outstrips the demand by incredible amounts. And should you really create an incentive for hospitals to disregard the costs associated with delivering faulty organs?!?! In light of all these concerns, is the court really going to be talking about THE SIZE OF THE FONT???

I'm sure there are some pro policy arguments, such as it would be unfair to place a non-profit public organization in the position of potential extreme liability, or that hospitals compete with eachother for business, but I doubt they'll the win the day.

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Re: Hypo for you Contracts Wizards

Postby swc65 » Sun Dec 05, 2010 3:40 am

Total Litigator wrote:And by the way, the short answer is "HOSPITALS CAN'T PUT A LIABILITY WAIVER ON ORGANS, THIS ISN'T IT BREAKS YOU BUY, THIS IS IT BREAKS YOU DIE."
For so many reasons... 3 off the top of my head... Think about the bargaining position of the "buyer" contracting away their rights. They need the organ or they'll die. Think about the supply and demand and who has control, the hospital owns the market for organs and supply outstrips the demand by incredible amounts. And should you really create an incentive for hospitals to disregard the costs associated with delivering faulty organs?!?! In light of all these concerns, is the court really going to be talking about THE SIZE OF THE FONT???

I'm sure there are some pro policy arguments, such as it would be unfair to place a non-profit public organization in the position of potential extreme liability, or that hospitals compete with each other for business, but I doubt they'll the win the day.


I was under the impression that the hospital was the buyer of these organs. The seller had the clause in the K to protect it from the hospital. I did not think the hypo was about the hospital disclaiming liability to the patient.


Also, the against public policy arguments would great except two things. The hypo mentioned that the sale of organs is enforced under common law principles according statute- which may imply that in this hypothetical state organ supply contracts are fine (as they most certainly are in real life). Second, I surely cannot sell my kidney. However, if I died and the hospital extracts my kidney, it will be given to an organ supply company that specializes in the storage and transport of organs. Thus, this is a service of supplying organs not the sale of organs.This is also supported by the statute's designation of the sale of organs as a service. It would not make sense for a state to say it's illegal to sell this, but if you do the common law rules govern this sale should have a contract dispute.
Some of these organ transport service companies are pretty small, I would bet real money they use clauses in their contracts just like this since they just transport the organ and probably have no idea what state the organ is in when they receive it.

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Re: Hypo for you Contracts Wizards

Postby vanwinkle » Sun Dec 05, 2010 3:50 am

swc65 wrote:Also, the against public policy arguments would great except two things. The hypo mentioned that the sale of organs is enforced under common law principles according statute- which may imply that in this hypothetical state organ supply contracts are fine (as they most certainly are in real life). Second, I surely cannot sell my kidney. However, if I died and the hospital extracts my kidney, it will be given to an organ supply company that specializes in the storage and transport of organs. Thus, this is a service of supplying organs not the sale of organs.This is also supported by the statute's designation of the sale of organs as a service. It would not make sense for a state to say it's illegal to sell this, but if you do the common law rules govern this sale should have a contract dispute.

If this is how you want to approach the public policy problem, that's great. You can argue that there are reasons this contract isn't void for public policy reasons. But you'd better make those arguments on the exam, instead of just looking at it and going, "Oh, public policy isn't a problem here," and not writing anything.

Hint: If your prof picks human organs as the good/service involved, it means he wants you to have this discussion, no matter how you'd come out on it.

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Re: Hypo for you Contracts Wizards

Postby Total Litigator » Sun Dec 05, 2010 3:59 am

Well I admit that I didn't read the particular facts carefully. There are mutual assent issues and such here. That being said, a public policy argument is the one that is really screaming for attention here. I was amazed that everyone immediately dove right into black letter law, and the person who did mention unconscionability was only referring to it as a procedural manner.

I still stand by the fact that the deciding issue here is whether the waiver is void as against public policy, and I honestly can't see any other answer but that it must be. Somebody has to shoulder the risk in this case, and it can't be the poor guy receiving the organ. I guess you could argue that it is fine for the hospital to shoulder the risk, but I really doubt that an arguement that the procurer and original seller of the organ could ever be immune from liability would ever fly.

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Re: Hypo for you Contracts Wizards

Postby Renzo » Sun Dec 05, 2010 9:42 am

vanwinkle wrote:Um. Am I the only one seeing the obvious thing that should be Issue #1 addressed on the exam?

This contract should be unenforceable anywhere in the country. Regardless of whether the transaction is defined as a good or service, a sale of human organs will be void in the courts for public policy reasons. You can sell plasma, but not organs.

I'd agree that you should do the remaining analysis after hitting that point, in case the court does decide to entertain the contract, but this has to be the reason the hypo is about organ transplants. The prof wants to see how many students catch that and address both the public policy problem and the underlying contract. If you just say it's void for public policy and stop there, or if you just jump straight into the contract terms, you're not getting an A.


This is one issue that I thought might be over-summarized in the OP. It seems like there is statutory language on point in the hypo, such that answering the policy part of this requires more info.

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Re: Hypo for you Contracts Wizards

Postby vanwinkle » Sun Dec 05, 2010 12:16 pm

Renzo wrote:This is one issue that I thought might be over-summarized in the OP. It seems like there is statutory language on point in the hypo, such that answering the policy part of this requires more info.

I went back and looked it up from last year. There's a federal statute declaring it illegal for anyone to "knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation". If this was an organ sale, then the contract would be void for public policy because it's illegal regardless of what the state statute says. The fact that the hypo assigns a dollar value to the organ itself ($100) makes me think that this is an organ sale contract which would be void. Even if the state statute purports to legalize this, the court should still strike the contract for public policy reasons.

But the statute also says "valuable consideration" doesn't include reasonable payment for the expenses incurred during the donation of an organ. You can be given money for the costs of removing, transporting, and implanting the organ, but it's still treated as a donation and not a sale/transaction. If it's just a donation, then there's no consideration (since a donation is something given without consideration, and since compensation for expenses are defined by federal statute as not being consideration) and no contract.

I would still do the remaining analysis. I think it's important to do both for an A answer here, to run through the policy debate and then say how it'd be implemented if it isn't void for public policy. But I think you have to open with that question because it's the big obvious question.

Total Litigator wrote:I still stand by the fact that the deciding issue here is whether the waiver is void as against public policy, and I honestly can't see any other answer but that it must be. Somebody has to shoulder the risk in this case, and it can't be the poor guy receiving the organ.

Dude, what? No. It's not that the waiver would be void, the whole contract would be void. What I'm saying is that you can't make a contract like this at all, which would mean that the organ recipient has no recourse under contract law. The poor guy receiving the organ may not have a contract remedy here, even if that seems unfair to him.

Under contract law, you don't determine who should shoulder risk in every circumstance, you just determine whether a lawful contract was created. Questions of who shoulder the risk should be answered under tort law in that case (if an unhealthy organ was implanted in someone, was it due to someone's negligence), but that's well outside the scope of a contracts exam.

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Re: Hypo for you Contracts Wizards

Postby Total Litigator » Sun Dec 05, 2010 2:48 pm

vanwinkle wrote:
Total Litigator wrote:I still stand by the fact that the deciding issue here is whether the waiver is void as against public policy, and I honestly can't see any other answer but that it must be. Somebody has to shoulder the risk in this case, and it can't be the poor guy receiving the organ.

Dude, what? No. It's not that the waiver would be void, the whole contract would be void. What I'm saying is that you can't make a contract like this at all, which would mean that the organ recipient has no recourse under contract law. The poor guy receiving the organ may not have a contract remedy here, even if that seems unfair to him.

Under contract law, you don't determine who should shoulder risk in every circumstance, you just determine whether a lawful contract was created. Questions of who shoulder the risk should be answered under tort law in that case (if an unhealthy organ was implanted in someone, was it due to someone's negligence), but that's well outside the scope of a contracts exam.


Okay, well I had assumed that the US had legalized the process and that it was being sold at cost or something. I was probably wrong (I'm not sure how the system works and I don't know how the states have worked around federal law restrictions) but this seemed to me like a situation in which a judge would have to decide that a waiver of a warranty was void as against public policy. And isn't it true that public policy arguments can extend outside the realms of contract law to the area of risk, especially if the argument is based on principle?

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Re: Hypo for you Contracts Wizards

Postby burtonrideclub » Sun Dec 05, 2010 3:51 pm

Well, checked on this a day later and I seem to have created mass confusion due to parts I left out. Here are some other background facts, verbatim from the prompt. After reading all the insightful responses, I apologize for the confusion by leaving out important parts.

Biotech, NY company, sells body parts for transplant surgery. It legally obtains the tissue from hospitals and mortuaries only when it has proof that the deceased intended to donate these parts to help others. Biotech then prepares the tissue for transplant, and resells it to hospitals and physician groups. As part of the prep, Biotech tests the tissue for various diseases that could be transmitted to the transplant patient.

Warranty
Biotech co. warrants that this human tissue product conforms to the label desciption ad the the human tissue will remain viable for up to three months from date of sale when stored and sued according to product instructions. Biotech's liability for the produce lis limited to replacement of the product or refund of the purchase price. The foregoing express warranty excluses all other warranties, express or implied, including the warranty of merchantablity and the warranty of fitness for a particular purpose. Thereare no warrranties which extend beyond the description herein BIOTECH SHALL NOT BE LIABLE FOR ANY INCIDENTAL, EXEMPLARY, PUNITIVE, DIRECT, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF FAILURE TO MAKE USE OF THIS PRODUCT

Then the fact pattern consisted of the negotiations that entailed, follow by these statues

Tex Bus. and Commerce code 3-316 (hospital is in Texas)
Human blood, blood plsama, or other human tissue or organs from a blood bank or reservoir of such other tissues or organs shall not for the purpose o this stile be considered commodities subject to sale or barter, but shall be considered as medical services.

New York Public Health Law 580

The collection, processing, storage, distribution, or use of blood, blood components or blood derivatives for the purpose of diagnosis, prevention, or treatment of disease is hereby declared to be a public health service and shall not be construed to be, and is declared not to be, a sale of such blood, blood components or blood derivatives, for any purpose or purposes whatsover.

Again, sorry for leaving out things that obviously are important. Your answers so far have been extremely helpful in applying policy to questions, and if any of you want to give it another shot with the above info included I'd really appreciate it. Some smart people ITT.

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Re: Hypo for you Contracts Wizards

Postby vanwinkle » Sun Dec 05, 2010 4:11 pm

burtonrideclub wrote:Tex Bus. and Commerce code 3-316 (hospital is in Texas)
Human blood, blood plsama, or other human tissue or organs from a blood bank or reservoir of such other tissues or organs shall not for the purpose o this stile be considered commodities subject to sale or barter, but shall be considered as medical services.

New York Public Health Law 580

The collection, processing, storage, distribution, or use of blood, blood components or blood derivatives for the purpose of diagnosis, prevention, or treatment of disease is hereby declared to be a public health service and shall not be construed to be, and is declared not to be, a sale of such blood, blood components or blood derivatives, for any purpose or purposes whatsover.

I think both of these support the general point I was getting at, but clarify both how to answer the public policy problem and why you still need to get at the underlying contract.

You can get compensated for a service in the costs of preparing and conducting organ donation, but the actual organ itself is still something to be considered donated. Any contract that purports to cover the sale of the organ itself should be voided for public policy. Thus the value of the organ itself is irrelevant to the discussion ($100 for an organ, really?).

But what we're purporting here are the sale of services, and those services can be compensated. If the contract is interpreted that way, then the actual value of the contract is the value of the services involved in recovering and transporting that organ. Despite the organ itself being only $100, those services may be worth tens of thousands of dollars (organ removal, preservation, and transport is expensive). That describes the potential contract formation and its value.

I see two potential contract violations here:

1) Warranty considerations. People have covered the warranty analysis, but do this. If as part of their services they offer a warranty on the organ it could be legal, but there are the questions raised by the striking of the warranty clause. Other people have covered this adequately.

2) Failure to perform. If there's no warranty disclaimer here and the contract stands without it, there's an alternate argument to be made. Plaintiff could argue that because part of the services provided is testing the tissue before delivering it, organ company's contract obligation was to provide healthy organs; the "healthy" part could be an implied condition. If you fail to meet the conditions of a contract, even implied ones, then that's a breach of contract and can warrant damages.

In this case I think it's beneficial to plantiff to have the warranty section stricken and win on the second point, because the implied condition gives him breach of contract and access to better remedies. Warranty remedies would be limited to whatever the warranty specifies, and it limits them here to costs of providing a new organ or refund of the original costs. That takes care of remedies for warranty, but they don't help the plaintiff much.

Remedies for full breach, on the other hand, is much more flexible. The organ itself is worth $100, but that's a red herring. Everything says you can't contract for sale of organs, and this is a services contract. You have to determine what the value of the services is (I'd just pick a reasonable-sounding estimate range and identify it as such; possibly $10K-100K range, but in any case, whatever the hospital actually paid for those services). Then you can use that figure to run through your remedies analysis. Should plaintiff recover the amount paid? Should they recover an amount equal to what it takes to be made right (costs of new organ services + medical treatment incurred from the illness)?

Remember that a discussion about remedies is always limited to forseeable consequences of breach in order to allow for efficient breach, but here you can argue that the forseeable damages are significant (since it's easy to see that someone receiving a failing organ will cause them injury leading to significant expenses).

Also, the only way to get to $1M in damages is to include punitive damages, and the Supreme Court has recently indicated that it's improper to give punitive damages more than 10x actual damages. But if you argue that the actual damages are in the $50-100K range then it becomes possible to imagine $900K in punitive damages (following an argument about why punitive damages are appropriate, which they rarely are in contract law) and arrive at $1M in recovery.

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Re: Hypo for you Contracts Wizards

Postby Total Litigator » Sun Dec 05, 2010 4:38 pm

I agree with the above. That extra info does make a policy argument less of a standout issue though... although I think there is still room to discuss it.

As far as the problem goes, as other people have mentioned, there does seem to be a mutual assent issue, going towards simple basic offer and counter-offer contract analysis, the meat and bones of any first question on a standard contracts exam.

It appears to me that the hospital rejected the waiver term and then the agent did not accept those modified terms (he only said he'd relay the message). That would in theory make the hospital's action a counter offer, creating no actual contract at that point. However, there is also an issue here of objective intent. Under the circumstances can we really reasonably believe that the hospital thought that "I'll let the home office know" was an actual acceptance of the hospital's conditions of no waiver? I really don't think so, unless the hospital's previous dealings with the seller on that waiver point led him to reasonably believe that the seller would omit the term. This is a tenuous argument though, as each contract should be dealt with on an individual basis. The hospital's statement should therefore be treated as a counter-offer at this point.

However, unless I'm confused about the facts, the hospital then accepted the organ without receiving any confirmation that their counter offer was accepted. This would make the hospital's comment about the waiver a "grumbling assent" (not sure if this term was unique to my contracts class or not). Grumbling assents are still acceptances. Therefore it seems to me that, all other issues and arguments aside, the hospital did in fact accept the terms of the agreement, complete with the waiver. We can bring in the parol evidence rule then, but "I'll let the home office know" is not going to be seen as a subsequent modification of the contract, unless the prior course of dealing implies that it was (e.g. the agent always said "I'll let them know," and the home office always confirmed that the waiver term would be removed).

And I think the NY and TX statutes make it clear that the UCC is not to apply to this transaction, so it should be decided based on common law.




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