Mitigation of Damages

• Author: Jeffrey Lehman, Shirelle Phelps

Page 96

The use of reasonable care and diligence in an effort to minimize or avoid injury.

Under the mitigation of damages doctrine, a person who has suffered an injury or loss should take reasonable action, where possible, to avoid additional injury or loss. The failure of a plaintiff to take protective steps after suffering an injury or loss can reduce the amount of the plaintiff's recovery. The mitigation of damages doctrine is sometimes called minimization of damages or the doctrine of AVOIDABLE CONSEQUENCES.

In contract law the non-breaching party should mitigate damages or risk a reduction in recovery for the breach. For example, assume that a property owner and home builder contract for the construction of a home in exchange for payment of $50,000. Assume further that the builder begins constructing the home but that the owner wrongfully cancels the contract before the builder has finished construction. If the builder must sue the owner to recover the unpaid portion of the contract price, a court may reduce the amount of money that the builder recovers if the builder does not try to avoid additional loss. For example, the builder could sell the materials already purchased for the job or use the materials in another job. The savings that the builder realizes will be deducted from the loss incurred on the contract in computing the builder's net recovery in court.

In TORT LAW mitigation of damages refers to conduct by the plaintiff that, although not constituting a civil wrong itself, may reduce the plaintiff's recovery. For example, if the victim of an assault used provocative words prior to the assault, the words may mitigate the plaintiff's damages. Most states limit mitigation of damages for provocative words to a possible reduction in PUNITIVE DAMAGES, as opposed to COMPENSATORY DAMAGES.

A tort victim also should act to mitigate damages subsequent to the wrongful acts of another. For instance, assume that the victim in the assault example suffers a broken leg. If the victim refuses to get medical treatment and the leg eventually must be amputated, the defendant may be...