What is Mitigation of Damages?
Mitigation of damages is a legal rule used in the US. It says that if someone suffers a loss because of another’s action, they must try to reduce their damages. This means they should act to lessen their financial losses. For example, if a company breaks a contract, the affected party should look for alternatives to avoid further losses. This rule is common in cases like breaches of contract and employment law. In a job termination scenario, the fired employee should seek a new job to decrease lost wages. This action helps prevent the accumulation of high compensation claims.
Key Takeaways
- Mitigation of damages is a legal rule that requires people to minimize their losses after an incident.
- It applies in situations like breaches of contract and requires reasonable actions to reduce harm.
- Failure to mitigate damages can lead to reduced compensation in a legal case.
- The rule ensures fairness and reasonable behavior in the face of damages.
Table of Content
- Legal Requirements for Mitigation
- Responsibilities of Parties to Mitigate Damages
- Strategies for Effective Mitigation
- Examples under Mitigation of Damages
- Conclusion
- Mitigation of Damages- FAQs