What must an injured party do to mitigate loss following breach of contract?
The injured party cannot recover loss that it could reasonably have avoided. Mitigation is a limitation on recoverable damages, not a separate duty owed to the party in breach.
Take reasonable steps in the circumstances, without being required to assume undue risk or surrender contractual rights
Act promptly, investigate practicable alternatives and keep a reasoned record. Reasonable mitigation cost is generally recoverable even if the measure does not succeed, provided the decision was reasonable when taken. Loss actually avoided must be credited where it results from the mitigating response. The injured party need not adopt speculative, unsafe, financially disproportionate or contractually prejudicial measures. The party alleging failure to mitigate must identify the reasonable step and avoidable loss.
| Issue | Position |
|---|---|
| Avoidable loss | Not recoverable |
| Reasonable mitigation cost | Potentially recoverable as damages |
| Unsuccessful reasonable step | May still be recoverable |
| Undue risk or disproportionate cost | Need not be accepted |
| Benefit from mitigation | Credit where legally attributable |
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