Mitigation, sometimes called the doctrine of avoidable consequences, means an injured party cannot recover losses it could reasonably have avoided. It is not a duty in the strict sense. Nobody can be sued for failing to mitigate. It simply limits the damages a court will award, so a plaintiff who sat back and let the loss grow is paid only for the part that was unavoidable.
Rule
- No recovery for avoidable loss. Damages exclude anything the injured party could have avoided without undue risk, burden or humiliation.
- Stop performing. Once a repudiation is clear, continuing to run up costs on the contract is unreasonable and those costs are not recoverable.
- Reasonable substitutes. A seller may resell, a buyer may cover, and an employee must look for comparable work. The substitute has to be reasonable, not perfect.
- Costs of mitigating are recoverable. Money spent in a reasonable attempt to reduce the loss comes back, even if the attempt failed.
- Burden. The breaching party must prove that the loss could have been avoided.
Leading cases
- Rockingham County v. Luten Bridge Co.: a contractor who kept building a bridge after the county canceled could recover its costs to the date of repudiation plus profit, not the cost of the work it chose to finish.
- Parker v. Twentieth Century-Fox Film Corp.: an actress did not have to accept a different and inferior role to mitigate, so the studio could not deduct that salary from her damages.
Where students go wrong
The first mistake is calling mitigation a duty and then looking for a claim against the plaintiff. It is a ceiling on recovery, nothing more, and framing it as an independent obligation confuses the analysis.
The second is assuming any substitute counts. A wrongfully discharged employee must seek comparable work in the same field and locality. Different or inferior work is not a reasonable substitute, and refusing it does not cut the award.
The third is putting the burden on the wrong party. The plaintiff does not have to prove it tried. The defendant has to prove that a reasonable person in the plaintiff's position would have avoided the loss.
FAQ
Does mitigation apply to torts as well as contracts?
Yes. The same avoidable consequences principle limits tort damages, most visibly where an injured plaintiff refuses ordinary medical treatment.
What if mitigation costs more than the original loss?
Then it was probably not reasonable. The standard is what a sensible person would do, and a plaintiff is not required to take on undue risk or expense.
Can a plaintiff recover the cost of a failed attempt to mitigate?
Yes, provided the attempt was reasonable when it was made. Courts judge the decision at the time, not with the benefit of hindsight.
Related terms
Working through this in your own casebook takes longer than reading it here. Syllume starts from your syllabus and turns each assigned case into a brief you can study from.