Mitigation of Damages

In one sentence

A duty to take reasonable steps to minimize losses caused by another party's breach.

Plain English

When someone breaches a contract and injures you, you have a legal duty to limit the damage as much as reasonably possible. You can't just sit back and let losses pile up, then demand the breaching party pay for all of it. For example, if a contractor abandons a job, you must hire a replacement promptly—you can't wait months and then bill the original contractor for all the extra costs. Courts will only award damages that couldn't have been prevented by reasonable effort.

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Example

A landlord breaches a lease by making the apartment uninhabitable. The tenant's duty to mitigate means they should find another place to live promptly rather than staying in the broken apartment for months and racking up medical bills. The tenant can recover rent for the time they reasonably needed to relocate, but not for months of unnecessary exposure.

Used in a sentence

“The employee's failure to seek other work after being wrongfully fired reduced the damages the employer owed for mitigation of damages.”

Related terms

Breach of Contract

Failure to do what a contract requires, without a valid legal excuse.

Material Breach

A significant failure to perform a contract obligation that defeats its core purpose.

Actual Breach

Failure to perform a contract duty on or after the date performance is due.

Anticipatory Breach

A party's clear statement or action showing they won't perform their contract duties before the due date.

Rescission

Unwinding a contract entirely, returning both parties to their positions before the deal.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.