• When Does a Party Have a Duty to Mitigate Damages?

    When Does a Party Have a Duty to Mitigate DamagesWhen a contractual agreement is breached, the party who has suffered damages (the non-breaching party) has a general duty to exercise efforts to mitigate his losses. This means that the injured party must minimize the harms flowing from violation of the agreement. The failure to mitigate is not a separate cause of action; rather it is used as a defense to show that plaintiff’s recovery should be reduced because the plaintiff did not make reasonable efforts to mitigate the damages he incurred.

    The duty to mitigate does not mandate that the non-breaching party take extraordinary steps; rather he must act reasonably to lessen damages or risk having his compensation reduced if the court finds that the damages could have been reasonably avoided. The duty to mitigate damages has an important social and economic purpose: it is designed to prevent waste which benefits society in general. The injured party is expected to make reasonable efforts to avoid economic waste. The duty to mitigate damages arises in several types of contractual relationships.

    Construction contracts. If a contractor does not complete construction of a commercial structure or fails to meet timely deadlines related to construction, then the counterparty has a claim for damages for failure to perform the contract. The building owner has a legal obligation to mitigate the consequences of the loss resulting from the time delay.

    Breach of lease. When a lease is terminated, the landlord is obligated to mitigate damages that result from the termination. This means that the landlord must make reasonable efforts to locate a new tenant and cannot simply allow the property to remain vacant. The rent collected from the new tenant would reduce the amount that the landlord can collect from the previous defaulting tenant. In Georgia, a landlord is not obligated to mitigate damages where the tenant abandoned the premises prior to expiration of the lease. The duty to mitigate is relevant only when the landlord accepted surrender of the property.

    Sale of goods. When a buyer breaches a contract for the sale of goods, the seller is required to find a new buyer. The seller does not fulfill his duty if he sits idly and does not attempt to resell the goods or lets the goods become unusable and not fit for resale.

    Wrongful termination. An employee must actively seek new employment when he has been wrongfully terminated. He cannot simply collect lost wages without showing effort to obtain new employment.

    The experienced team of attorneys at the Law Offices of Mark Weinstein, P.C. can help you litigate your real estate claims. Contact Mark Weinstein and his colleagues at (770) 888-7707 or visit them at http://www.markweinsteinlaw.com to find out how they can advise you.

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