Mitigation of Damages

We discovered a recent case that discusses the doctrine of "mitigation of damages."  That doctrine essentially holds that if one is damaged in an accident or transaction, that person has at least some obligation to try and limit the amount of damages that person incurs.  For instance, if a tenant moves out of a building in violation of a lease agreement, the landlord has a good faith obligation to try release the building to try an minimize the loss.

In this recent case, the Court made it clear that while an injured/non-breaching party has an obligation to use "reasonable" efforts to mitigate damages, that party does not have to use "extraordinary" efforts to do so.  The Court also held that it is the breaching party that has the "burden" of proving that the injured party did not mitigate its damages.

Something to think about when things go wrong.