Question 1

Am I required to mitigate my damages?

Accepted Answer

Yes. In virtually every jurisdiction, the injured party has a duty to take reasonable steps to reduce their losses. If you don't, a court will reduce your damages by the amount you could have avoided. You can't be passive and expect to collect the maximum.

Question 2

What counts as 'reasonable' mitigation?

Accepted Answer

You're expected to make reasonable efforts, not extraordinary ones. Finding an alternative supplier at a similar price is reasonable. Accepting a product that's dramatically different from what you contracted for, or spending more on mitigation than the original contract was worth, is not.

Question 3

What happens if I don't mitigate my damages?

Accepted Answer

The breaching party's lawyer will argue — and a court will likely agree — that your recoverable damages should be reduced. You'll only get damages for losses you couldn't have reasonably avoided. The burden is on the breaching party to prove you failed to mitigate.

Question 4

Does mitigation apply to employment contracts?

Accepted Answer

Yes. If you're wrongfully terminated, you're expected to seek comparable employment. You don't have to take any job — it needs to be similar in role, pay, and location. But if you turn down a comparable position, a court will reduce your damages by what you would have earned there.

Question 5

Can I recover the costs of mitigation?

Accepted Answer

Yes. Reasonable expenses incurred while mitigating — like the cost of finding an alternative supplier or hiring a temp worker — are recoverable as incidental damages. You're not expected to mitigate for free.

Mitigation of Damages

Definition

In Practice

Common in these contract types

Related terms

Frequently asked questions about mitigation of damages

Create a contract with proper mitigation of damages clauses