Mitigation of contract loss
A party claiming damages for breach cannot ordinarily recover loss that reasonable steps would have avoided. The required response is judged in the circumstances; it does not require taking unreasonable financial or practical risks, and reasonable mitigation costs may themselves be recoverable. The rule affects the amount recoverable rather than imposing a general duty to rescue the contract breaker. Identify the breach, foreseeable loss and available alternatives before assessing what was reasonable.
Worked example
A buyer faces a supplier’s breach and reasonably obtains substitute goods for $1,200 instead of waiting while losses mount. The buyer can assess the additional reasonable cost against the contract price; it need not accept a defective replacement merely to minimise expenditure.
Common mistake
Assuming every conceivable loss is recoverable, or that the claimant must take disproportionate risks to reduce it.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | LW (ENG) | Direct | September 2026–June 2027 |