Legal Definitions - damages, mitigation of

Mitigation of Damages refers to the legal principle known as the Mitigation-of-Damages Doctrine.

This doctrine states that a party who has suffered a loss due to the wrongful act of another (such as a breach of contract or a personal injury) has a legal duty to take reasonable steps to minimize or reduce the extent of their own financial losses. Essentially, the wronged party cannot simply allow their damages to accumulate without making an effort to prevent further harm or expense.

If the wronged party fails to take reasonable steps to mitigate their damages, a court may reduce the amount of compensation they can recover from the party who caused the harm. The purpose of this doctrine is to encourage efficiency and prevent avoidable losses.

Here are some examples illustrating the Mitigation-of-Damages Doctrine:

• Example 1: Breach of Employment Contract

  Imagine a software engineer, Sarah, is wrongfully terminated from her job with a year remaining on her contract. Under the Mitigation-of-Damages Doctrine, Sarah has a duty to actively seek comparable employment elsewhere. She cannot simply sit at home for a year and expect her former employer to pay her full salary for the entire remaining contract period if she could have found another job. If Sarah finds a new job three months later that pays a similar salary, her damages from the wrongful termination would likely be limited to the three months of lost income, as she successfully mitigated her losses by finding new work.

• Example 2: Breach of Residential Lease Agreement

  Consider a landlord, Mr. Henderson, whose tenant, Lisa, breaks her 12-month lease agreement after only two months, moving out unexpectedly. Mr. Henderson has a duty to mitigate his damages. This means he cannot simply leave the apartment vacant for the remaining ten months and sue Lisa for all ten months' rent. Instead, he must make reasonable efforts to find a new tenant, such as advertising the vacancy, showing the apartment, and processing applications. If Mr. Henderson finds a new tenant after two months, Lisa would typically be responsible for the two months of lost rent and any reasonable costs Mr. Henderson incurred in finding a new tenant (like advertising fees), but not the full ten months of rent she originally owed.

• Example 3: Property Damage from Negligence

  Suppose a delivery truck driver negligently backs into a fence belonging to homeowner David, causing significant damage. After the initial impact, a storm is forecast for the following day, and the damaged fence could allow animals to enter David's yard and further damage his garden. David has a duty to mitigate his damages. This might involve temporarily securing the damaged section of the fence with readily available materials or arranging for emergency repairs to prevent additional harm to his property. If David fails to take these reasonable temporary measures and his garden is subsequently destroyed by animals entering through the unrepaired fence, the court might reduce the amount the truck driver's company has to pay for the garden damage, as David could have reasonably prevented that additional loss.