When a person suffers damages as a result of a breach of contract, he or she has the legal obligation to minimize the effects and losses resulting from the injury. The duty to mitigate works to deny recovery of any part of damages that could have been reasonably avoided. "Reasonably avoided" has no specific definition, but generally means what a reasonable person would do under similar circumstances. An innocent party is not required to take extraordinary efforts or sacrifice any substantial right to avoid losses from a breach of contract.
- A landlord has a duty to mitigate his damages when a tenant breaches a lease. The landlord has a duty to find another tenant, and cannot let the property sit empty for two years and sue the old tenant for back rent.
- An employee who has been wrongly terminated must mitigate his damages by finding another job. He cannot sit around idly and sue the employer for his lost wages.
- The seller of a good must mitigate his damages by trying to resell them after a buyer has breached the contract. For example, when a buyer of live lobsters breaches a contract, the seller must try to resell the lobsters. He cannot let them die and then sue the buyer for damages.
- A creditor must mitigate his damages when a debtor breaches. For example, if a debtor breaches on his car loan, the creditor must mitigate by attempting to sell the car. He cannot keep the car and sue the debtor for damages.
The duty to mitigate will almost always come up in determining your right to recover damages. A business attorney can help explain the law and your rights. Additionally, an attorney can give advice on what to do to preserve your claim.