What is Mitigation of Damages?
Mitigation of damages involves taking steps to lessen the harm that occurs as a result of someone else's improper actions. It is a legal term, used to limit recovery in civil litigation. It places the obligation on a plaintiff to resolve his situation, and limits the amount of damages a plaintiff will receive if he fails to do so.
When a person is wronged by another, the victim has the opportunity to recover damages in a civil suit. There are many types of civil suits, but most are grounded in either tort or breach of contract. Tort refers to injury that occurs as a result of negligent or intentional improper actions. Breach of contract refers to one party's failure to fulfill the negotiated terms of a contract.
A person can be monetarily damaged in many ways by both tort and breach of contract. To recover damages, the victim must show that the damages occurred as a result of the defendant's behavior. The victim is entitled to recover all damages necessary to make him whole (i.e. to put him back in the position he would be in had the improper action not occurred), but he must take reasonable steps to mitigate damages.
Mitigation of damages takes many forms, depending on the nature of the damages and the cause of action. For example, in a breach of contract case, a party to a contract may incur damages as a result of the defendant's failure to deliver promised goods. The plaintiff may have the obligation to attempt to acquire those goods from another source, in order to mitigate damages.
If the plaintiff takes no steps to attempt mitigation of damages by acquiring the goods elsewhere, his recovery can be limited. For example, if he lost $1000.00 in sales for each month that the goods were not delivered, but he passed up an opportunity to acquire goods a month after the contract was breached, he may be limited to recovering only one month of damages from the defendant.
Mitigation of damages also occurs when a lease-holder breaks a lease. The landlord can recover damages in the form of unpaid rent that the leaseholder should have paid. He must, however, practice mitigation of damages by attempting to find another tenant to take over the lease.
Mitigation of damages protects a defendant from unfair liability. A defendant must be held accountable for the loss that he caused. The plaintiff cannot, however, take advantage of his right to recovery by refusing to attempt to rectify his situation.
@Melonlity -- Some contracts, however, try to take mitigation out of the mix completely. Hey, Sue would probably like to get the money Joe owes her for back rent and the cash she could get by renting the place out again. Sue would not want to deal with mitigation at all, and there may be a clause in that rental agreement that allows her do avoid it completely.
Is that clause valid? A court would need to decide that.
You see this concept in contract law all the time. If Joe skips out on his rent to Sue but Sue doesn't even try to recover some of that lost rent by putting the place up for rent again, why should she recover everything that Joe owes her for the rent he didn't pay?
Mitigation is a great legal concept that recognizes people can take steps to help themselves and suggests they should do it.
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