In law school you are required to argue for either the Plaintiff or the Defendant on a particular issue. Even if one side “does not have a realistic argument”, you must advocate for your position. Since some issues are in the grey zone, “not black letter law”, you must come up with the best argument based on the available case law, judge’s written opinions, cases from other jurisdictions, etc. You build your case, rehearse your presentation and argue for the benefit of your client.

What if health care students during classroom discussion and clinical training were required to argue for or against the diagnosis that the patient might be exhibiting. Imagine being assigned the task of defending your diagnosis of cancer of the head of the pancreas advocating for the patient since you know that early diagnosis and treatment is the best best chance of survival. In the alternative, you are assigned the task of advocating against the diagnosis which would subject the patient to extensive and expensive workups which may or may not yield a definitive answer.

Seventeen year old white male with right lower quadrant pain for 24 hour duration association with nausea and vomiting, elevated white count and point tenderness over McBurney’s point. Easy argument for appendicitis. Harder argument against. Imagine the same scenario except the patient is now a seventeen year old female who is mid-cycle. Now both sides have a legitimate argument for or against appendicitis.

Health care professional students, residents and fellows should use this as an intellectual exercise to be the patient’s advocate when making a diagnosis, weighing the options, maximizing resources and minimizing the stress we put our patients through during our clinical encounters.

In law school, the volume of material you have to read, review, learn and recite is overwhelming. Since you usually only have a final exam for the semester long course, the studying for the final exam can be overwhelming.

Enter the law student’s best friend, the outline. Type in law school outlines on any search engine and you will see a large number of websites at different law schools with outlines of different course and/or different instructors.

Cases read, discussions, lectures, and supplemental material are all in the outline. This serves first to merge larges volumes of material into a single document available for review and study and second as a learning experience as you compile and digest this material.

However, this can result in book size amount of material to review for the exam. Thus starts the condensation of the course outline to a manageable level. Each condensation removes non-essential material while serving as a learning tool in its development.

At each stage, key words, phrases, sentences are retained to trigger concepts needed for mastery of the examinations. These self-produced study guides serve students well as learning tools during examinations and board reviews.

Imagine condensing 100 pages into five or less pages easily reviewable during finals week and before the exam. In addition this could serve as a resource for the bar exam and client consultation.

What if health care professional students used this same technique even in the face of multiple examinations? You could build a solid set of notes condensed to the bare essentials available on a moment’s notice for oral examination, clinical presentations, patient interactions, etc.

In my graduate LL.M. program, students were encouraged to make power point presentation of material they were learning. Can you think of a better study technique? If you can explain concepts using bullet points, you probably have a firm grasp on the material. In addition, one additional benefit is these presentations can serve as the basis of your patient education material when the health care professional enters private practice.

A Breach of a Contract is the failure of one or more parties to perform contractual obligations that they have a legal duty to perform.

A Material Breach occurs when the non-breaching party does not receive the substantial benefit for which he/she has contracted.

A Non-Material Breach occurs when the non-breaching party has received the substantial benefit of the contract but there are lesser deviations or non-performance aspects which does not fulfill the bargained for exchange sought by the non-breaching party.

According to Black’s Law Dictionary, a remedy is the means of enforcing a right or preventing or redressing a wrong.

Remedies generally available to health care professionals are usually of two types: 1) specific performance and 2) monetary damages.

Monetary damages are the second type of remedy we will discuss available to the non-breaching party. Monetary Damages are categorized into four types:

•           1) Compensatory Damages
•           2) Consequential Damages
•           3) Liquidation Damages
•           4) Nominal Damages

Compensatory Damages

Damages that place the non-breaching party in a same position that they would have been in if the contract had been fully performed. The award may include compensation for gains prevented, the profit you would have made had the office operating room been completed plus losses sustained.

Consequential Damages

          These are damages suffered by the non-breaching party due to circumstances that the breaching party knew or should have known might occur at the time of the contract. NOTE: Some of the favorite words of the lawyers are “the defendant, you the health care provider, knew or should have known circumstances that the patient was unaware of when you entered into the agreement (contract) with the patient.”

Liquidation Damages

These are usually monetary damages decided and agreed upon by the various parties prior to signing the contract. These damages must be reasonably foreseeable and fair in amount. They may be also added to the contract if the actual damages may be difficult or impractical to determine.

The major goals of liquidation damages in contracts are;

•                     1) incentive to enter into contracts
•                     2) method of avoid the time, expense and uncertainty of lawsuits

Nominal Damages

          These are best known as symbolic damages or damages sought on principle. The award is usually for $1.00.

The main purpose of these damages is establishing a precedent.

Punitive Damages

          As I have discussed in previous posts, attorneys are now looking at patient dissatisfaction as breach of contract. Normally, contract law does not provide for punitive damages unless the breach of contract rose to the level of being a tort. NOTE: Torts is a division of the law dealing with injury to another person or his property and the remedies available to the injured party.

Mitigation of damages

The non-breaching party has an obligation to mitigate his/her damages. This means that if the supplier you contracted with is not able or refuses to deliver the needed supplies for your surgical center, you must obtain those supplies from another source if available even for a higher price. You cannot ask for extended damages for lost revenue because you would not buy supplies from another supplier because they were more expensive. You do have the right to seek damages for the lost revenue till the time of acquiring the new supplies and the additional premium you had to pay for those supplies.

(Excerpt from We TEACH the Business of Medicine Series™)

A Breach of a Contract is the failure of one or more parties to perform contractual obligations that they have a legal duty to perform.

A Material Breach occurs when the non-breaching party does not receive the substantial benefit for which he/she has contracted.

A Non-Material Breach occurs when the non-breaching party has received the substantial benefit of the contract but there are lesser deviations or non-performance aspects which does not fulfill the bargained for exchange sought by the non-breaching party.

According to Black’s Law Dictionary, a remedy is the means of enforcing a right or preventing or redressing a wrong.

Remedies generally available to health care professionals are usually of two types: 1) specific performance and 2) monetary damages.

Specific performance is the requirement to perform the contractual obligations that you were legally obligated to do. An example for the health care professional might be an agreement to perform a specific service for a specific price. Once the contract has been signed the health care professional cannot raise the price of the service contracted for nor can they refuse to perform the service unless a higher price is paid.

Another example might be hiring a famous singer for your child’s birthday party. A contract was signed between the singer’s agent and you. The singer now refuses to perform because the singer got a better offer for that day. You cannot force the singer to perform if they refuse. However, you can file an injunction preventing the singer from performing for the better offer since you have a contract for their specific performance on that date.

Monetary damages are the second type of remedy we will discuss available to the non-breaching party. Monetary Damages are categorized into four types:

1) Compensatory Damages

2) Consequential Damages

3) Liquidation Damages

4) Nominal Damages

Excerpt from We TEACH the Business of Medicine Series.™

If a breach does occur the court (legal system) will try to determine whether the breach was material vs. non-material.

A non-material breach occurs when a substantial amount of the promise has been performed but there has been a deviation from the contract. An example of a non-material breach is painting the walls of your office the wrong color after total renovation of the office. When this occurs you as the non-breaching party cannot say I am not going to pay for any of the renovation since you painted the walls the wrong color. You can sue for partial damages required to repaint the walls but you are not excused from your obligation of paying for the renovation.

Contrast this with a material breach. A deviation so far from the intent of the contract that it defeats the purpose of the contract is a material breach. The health care provider contracted for the building of a surgery center. After construction, you find the contractor built a spa facility. Since the infrastructure needed for the surgery center is specific and regulated, the spa does not satisfy the intent of the contract and defeats the purpose of the contract. At the point of discovery, you may cancel the contract and sue for damages or continue the contract and sue for partial damages. In this particular case, continuing the contract would serve no useful purpose.

A twist on both material and non-material breach is a contract that can be divisible or segmented by the judicial system. An example would be a contract calling for the building of four offices for health care professionals in different locations contacted for by a parent organization. If only three of the offices were built and the fourth was not built for whatever reason, the court might find this contract divisible and the non-breaching party would be responsible for paying the breaching party for the three offices built even though the contract called for four offices to be built. The court might allow the non-breaching party to collect partial damages for the delay in obtaining the four offices.

Once the breach has occurred then the non-breaching party must sue for a remedy which is the legal system’s term for redressing a wrong. This usually results in a monetary payment to the non-breaching party by the breaching party. Depending on the contract, the relief could be the requirement of performance by the breaching party.

(Excerpt from We TEACH the Business of Medicine Series )

Since contracts are broken on a daily basis the health care professional is likely to be a party to breach of a contract over the course of his/her career. Health care professionals should know when a breach is occurring or has occurred and what their options are.

In addition, a patient may sue the health care professional for breach of their contractual duty as regards to treatment provided to the patient. The health care professional should always keep this in mind when providing a bargained for exchange with the patient. The health care provider should never promise to make the patient good as new or provide unrealistic expectations to the patient. Health care providers look at improvement on an objective basis. The patient’s perspective may be entirely different because their basis may be subjective. Never promise a patient that you will not stop until they are satisfied or any combination of this promise. The health care provider would be sitting themselves up for breach of contract with the patient if the results are based on the patient’s subjective satisfaction.

A breach is non-performance of a contractual duty when it becomes due. Failing to make a payment when it becomes due is a breach of a contract. Failure to provide a service contracted for is a breach. In a contract involving the sale of goods; if the seller is delivering non-conforming goods or the buyer is rejecting conforming goods that were the basis of a contract, then a breach has occurred.

A breach may occur

1) Before either party has performed

2) After one party has performed but the other party did not

3) After one party has performed but the other party has only partially performed

A special type of breach is an anticipatory repudiation. A breach may also occur before the contractual duty becomes due if the promisor either by words or actions indicates to the promisee that he/she have no intention of fulfilling their contractual duty. The non-breaching party can ask for an assurance of performance from the breaching party if he/she feels that the other party is not going to perform. If none is forthcoming, then the non-breaching party can sue for damages due to the breach. In addition, the non-breaching parties obligations are not longer required via contract.

(Excerpt from We TEACH the Business of Medicine Series)

The Statue of Frauds adopted by 49 out of 50 states, Louisiana being the exception, details types of contracts which must be in writing. In addition, there are minimum requirements that the writing must contain to be enforceable.

The types of contracts that must be in writing are

1. Contracts to answer for the debts of another
2. Contracts made upon the consideration of marriage
3. Contracts which cannot be performed within one year from their making
4. Contracts to sell any interest in real property
5. Contracts of executors or administrators to answer for the duty of the decedents
6. Contracts for the sale of goods for the price of $500.00 or more.

Requirements for the contract

1. Writing

a. Need only be a memorandum

b. May be more than one document

c. Permanent

(1) Must be retrievable recording

(a) Electronic

(b) Physical

     2. Enough content in the writing to identify the essential terms of the contract

a. Subject matter of the contract

b. Parties to the contract

c. Essential terms

     3. Signed by the party(s) to be charged

a. Must have intent to sign

b. Symbol adequate

c. Electronic signature adequate

Excerpt from We TEACH the Business of Medicine Series™       

 

A contract is a bargained-for-exchange or a promise for a promise that is legally enforceable.

In order for this bargained for exchange to be enforceable, there are generally three components;

1. an offer,
2. acceptance of that offer and
3. consideration

Contract law is dependant on the objective intent of the parties. What a reasonable person would conclude was the intent of the parties when they exchanged promises. Subjective intent is not taken into account.

Real Life Example

Now that you think you know about what constitutes a contract and what an offer, acceptance and consideration is I will present you with a real life contract issue.

Two individuals, brothers, were living in the same town. One brother had a car and the other brother had a girlfriend. The brother with the girlfriend wanted to take his girlfriend out on Saturday night. He called the brother with a car and said, “In exchange for borrowing your car on Saturday night, I will fill the car up with gas.” The brother with the car, not having anything planned on Saturday night and seeing his opportunity to get gas for the car said, “Yes, you can have my car on Saturday night in exchange for filling the car up with gas.”

The brother with the girlfriend picked up the car that evening and returned the car the next morning. The brother who owned the car was driving to breakfast the next morning when he noticed the gas gage was on empty. Calling his brother with the girlfriend he asked, “Did we not have an agreement, a promise for a promise that in return for borrowing my car, you would fill the car up with gas?”

“Yes, we did,” said the brother with the girlfriend, “we both fulfilled our bargained-for-exchange.” “You lent me your car for Saturday evening and I filled the car up before picking up my girlfriend. We then drove to Atlanta, Georgia to see a concert, some 120 miles away and then drove home, making a total round trip of 240 miles.”

At capacity, the VW held 10 gallons of gas and got about 20 miles per gallon. (True Story but the names were changed to protect the innocent)

 Questions to be Considered?

Was there a contract?

Identify the offer, the acceptance and the consideration?

Did each party suffer a legal detriment?

Was this a bargained-for-exchange?

Was the objective intent of each party satisfied?

A contract is a bargained-for-exchange or a promise for a promise that is legally enforceable.

In order for this bargained for exchange to be enforceable, there are generally three components;

1. an offer,
2. acceptance of that offer and
3. consideration.

Contract law is dependant on the objective intent of the parties. What a reasonable person would conclude was the intent of the parties when they exchanged promises. Subjective intent is not taken into account.

OFFER

The person making the offer, the offeror or promisor,

• has the intention to become legally bound.
• has identified the party to who he/she is making the offer, the offeree.
• has communicated the offer to the offeree.
• has identified the subject matter of the offer
• has identified the time frame in which the offer is to be completed

Communications that are not offers;

•           advertisements
•           price estimates
•           invitations to bid
•           letters of intent

Generally, with limited exceptions an offer may be terminated any time up to acceptance of the offer.

ACCEPTANCE

An acceptance is an intention by the offeree to accept the obligation of the offeror and to enter into a contract which is legally binding. The acceptance is acknowledged to the offeror by the offeree in the prescribed manner of the offer or in a reasonable manner if no method was called for by the offeror.

• Only the person to whom the offer is made can accept the offer.
• The group of offerees may be any size chosen by the offeror.
• Acceptance can be by any reasonable means unless the method of  acceptance is defined in the offer.
• The offer is accepted by a return promise in a bilateral contract and performance in a unilateral contract.
• An offer is accepted when the acceptance is placed in the mail. A rejection is valid upon receipt by the offeror.
• If an offeree makes a counter-offer or adds new conditions then the original offer is voided and the offeree now  becomes the offeror for a possible new contract. (There are exceptions to this if both parties are merchants)
  

CONSIDERATION

• Legal Detriment
• Consideration is a bargained for exchange
• Benefit to the promisor
• Detriment to the promisee

SUMMARY

In a bilateral contract, there are mutual promises (offer and acceptance) so that each side has both a benefit and a detriment.

• Farmer John needs his barn painted.
• He asks his neighbor if he will paint his barn for $1000.00.
• Each has promised something. Each has a benefit and detriment.
• Farmer John gets his barn painted.
• Farmer Johns must pay his neighbor $1000.00.
• The neighbor’s detriment is his services; his benefit is the $1000.00 that he receives.
• Both sides must be bound.

Excerpt from We TEACH the Business of Medicine Series

  What is a Contract?

The basic definition of a contract is a promise or bargained for exchange that is legally enforceable. In the simplest of words it is a promise for a promise. Promises that are not legally enforceable are not contracts.

A valid contract requires an offer, usually made by the offeror, an acceptance, usually be the offeree and consideration, something of value to be exchanged. As you are aware, contracts are made for future events where performance is expected or where a person gives up his legal right to undertake a particular activity.

  Types of Contracts

  Unilateral vs. Bilateral

Contracts can be made between one or more persons.

Unilateral contracts are unique in that there is an offeror but no designated offeree. An example of a unilateral contract would be a reward. I will pay a reward of $200.00 to anyone who finds and returns my only copy of my unpublished memoirs. I am the offeror who has made the promise, paying $200.00 for return of my memoirs. You do not become the offeree when you set out to find my memoirs. The contract is only fulfilled by the offeree by performance of finding and returning the memoirs.

As with everything, there is an exception to this rule. Contrast this with this hypothetical: my company promises to pay one million dollars to the first non-governmental private company to achieve manned space flight. This is a unilateral contract. There is an offeror and a promise but no designated offeree. The older legal view was that the offeror could cancel the offer at any time prior to complete performance.

The modern legal view states that if I am in the process of achieving this performance requirement by actually being in the plane and accelerating toward space, the offeror cannot cancel the promise.

Bilateral contracts are the type we are most familiar with in our daily lives. I, the homeowner, will pay you, the painter, $5,000.00 to paint my house in one month. The painter promises to paint the homeowner’s house in one month for the sum of $5,000.00. This is the traditional promise for a promise, or bargained for exchange where an offer is made and accepted and each party has a legal detriment, known as consideration. The homeowner is legally bound to pay $5,000.00 to paint the house and the painter is legally bound to paint the house in one month.

You next question should be what happens if the painter only paints half the house and fails to finish? This will be discussed when we talk about Breach and Remedies.

  Express vs. Implied

An express contract is one which is manifested by words either oral or written which would leave no doubt in the mind of a reasonable person that a contract had been formed.

An implied-in-fact contract is a legal contract based on the surrounding facts. We all have executed these contracts before. The computer system at your office breaks down. You or your office manager calls the computer repair/ IT person and says come over and fix our computer system. The computer repair/ IT person says they will come over and fix the computer system that day. The repair is completed and a bill is rendered for services performed. As long as the charges are reasonable, the practice is obligated to pay. By requesting you repair, you entered into a legally enforceable contract with the computer repair/ IT person based on facts.

An implied-in-law contract or alternatively called a quasi contract is not a legally enforceable contract but is enforced by the courts to prevent unjust enrichment (the retention of a benefit conferred by another, without offering compensation, in circumstances where compensation is reasonably expected, Black’s Law Dictionary, 7^th Edition, 1999). You as a health care provider have done this without realizing what you have done or the legal justification as to why you should get paid.

When you are seeing a patient/client who is unconscious or mentally incompetent to give consent for your exam and treatment, you rightly expect to be paid. However, you did not enter into a contract with this patient/client since there was not a bargained for exchange or promises. When you submit your bill you expect to get paid.

The legal justification for you getting paid is to prevent the patient/client from being unjustly enriched by receiving care provided by you without paying for it. The court again looks at the reasonable person standard acknowledging that a reasonable person if conscious would give their consent to be treated on an emergent or urgent basis to recover from their medical condition.

Excerpt from We TEACH the Business of Medicine Series