The Requirement to Mitigate Your Losses in a Breach of Contract

The Requirement to Mitigate Your Losses in a Breach of Contract

On behalf of Daniel Watkins of Watkins Firm, A Professional Corporation
Posted On October 30, 2018

The requirement to mitigate your losses in a breach of contract is a little known responsibility for the victim of a breach of contract.  The failure to take prudent, reasonable and timely action to mitigate the damages can substantially reduce or eliminate the responsibility of the breaching party to fairly compensate you for what has happened.  This is why it is important to contact the Watkins Firm as soon as possible after any breach of contract occurs regardless of your position in the agreement.

What is “mitigating the damages” under California law?  The party who has not caused the breach is required to take “prompt, reasonable and prudent action” to reduce the financial and business impact of the breach of contract on their company, and any resulting damages which may result from the breach.  Mitigating losses in a timely and comprehensive fashion protects your legal rights as you pursue a breach of contract action.  Mitigating the damages allows you to recover the maximum amount in a breach of contract dispute and prevents the other party from using this as a defense against their breach of contract.

Damages are simply the documentable financial losses that you or your business have incurred as a result of the breach of contract.  The requirement to mitigate your losses in a breach of contract is often the last thing on the mind of a business owner who has been disappointed by a contract partner.  However, this important step is the key to ensuring the maximum recovery in any breach of contract mediation, arbitration or business litigation.

The experienced breach of contract attorneys at the Watkins Firm have decades of experience in these disputes, and provide timely guidance to our clients to help them to protect their position, while ensuring that they have taken all actions required by law.  If you are concerned about a breach of contract we invite you to review the recommendations of our clients and contact us or call for a free and substantial consultation at 858-535-1511.

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San Diego, CA 92131

Telephone: (858) 535-1511
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