What is the reason you have to mitigate losses to recover damages in a breach of contract business dispute or lawsuit? California law requires you to take reasonable, prudent and timely action to mitigate the damages if you wish to recover for the impact of any breach of contract. What must a business owner do to meet their legal responsibilities (and fiduciary duty) to protect the financial position of the company and mitigate your losses?
Take Reasonable, Prudent and Timely Action
The law requires you to take substantive, reasonable, prudent and timely action to reduce (as much as possible) the impact of the breach of contract upon your business. The failure to do so can be used as a defense in a breach of contract lawsuit, and may substantially reduce or eliminate altogether your opportunity to recover financial damages for any losses you may experience due to the breach.
In most cases, this involves taking prompt action to find another vendor to fulfill the “benefit” of the original contract, and to prevent “cascading losses” – losses that escalate as you don’t fulfill your obligation, and so a business partner cannot fulfill theirs, and so on. You must do everything reasonably possible to find other ways to protect the business opportunities and profits you would have received if the contract had been fulfilled per its original terms.
It may be possible to simply negotiate a “premium” to allow more time, or to allow for substitution of materials. The experienced business litigation and breach of contract attorneys at the Watkins Firm will quickly and efficiently document the situation at hand, develop a plan of action to mitigate losses to recover damages in a breach of contract, and immediately pursue negotiations with opposing parties to seek a positive resolution to the dispute. We are fully prepared to take your case through negotiations, mediation, arbitration and, if needed, to trial in a Court of law.
You Must Mitigate Losses to Recover Damages in a Breach of Contract in San Diego
While you must mitigate losses to recover damages in a breach of contract case in San Diego and Southern California, how can you know what actions you must take? What constitutes “reasonable, prudent and timely” action? Your breach of contract attorney at the Watkins Firm will work with you to develop a detailed plan to protect your legal and financial interests. We invite you to review our podcast Episode 5 – Breach of Contract, the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
