Mitigation of damages is a contract law concept that requires that a victim in a contract dispute to minimize the damages that result from a breach of the contract. This means that the victim is legally obligated to act in a manner that will mitigate both the effects of the breach and their own personal losses.
If a victim does not mitigate damages, the court may refuse to award any exorbitant damages that could have been reasonably avoided by the victim. The court will evaluate the victim’s actions following the breach of contract to determine if they took steps that a reasonable person in similar circumstances would have taken to minimize their losses.
However, mitigation of damages does not require the victim to take extreme steps or make substantial sacrifices in order to avoid or minimize loss.
The court will first look at the contract itself. The court will determine what was promised and by whom. The court will evaluate the terms of the contract. The court will also decide if a breach occurred and if so, when. If no breach occurred, the plaintiff is not entitled to damages.
The court will then estimate damages by looking at whether the contract was partially fulfilled. The court will also examine the plaintiff’s actions to determine if the plaintiff was partially responsible for the damages. If so, the damage award may be reduced.
To better explain mitigation of damages, here are three examples:
If you entered into a contract with someone and subsequently breached that contract, you may be liable for damages. A business lawyer can help you assess the contract, calculate damages, and determine if the plaintiff was required to mitigate damages but did not do so.
Last Modified: 10-03-2016 08:58 PM PDTLaw Library Disclaimer
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