If another party has broken the terms of a business contract, you must take action to mitigate the damages in a contract breach or risk the ability to recover for them later. Here in San Diego and Southern California, our state and federal business laws require the victim of a breach of contract to take “timely, reasonable and prudent” action to reduce the impact of the breach of contract on their business. In other words, you must take prompt and substantial action to mitigate the damages in a breach of contract situation, or you may not be able to recover part or all of the losses that have resulted from the contract breach.
What Does it Mean to Mitigate the Damages in a Contract Breach?
What does it mean to mitigate the damages in a contract breach scenario? With the exception of real estate, one cannot force another to perform on a contract. Therefore, business litigation is all about financial damages, and protecting your interests can make a substantial financial impact on your business.
Mitigating losses can include everything from negotiating to resolve areas of conflict, extend time frames or modify the terms of the original agreement. It can also involve all of the costs to find another supplier who is able to fulfill the original benefit of the bargain anticipated in the original contract that has been breached.
What Types of Financial Damages Can Result from a Breach of Contract
The primary remedy in a breach of contract case is “damages.” What types of financial damages can result from a breach of contract? Your experienced breach of contract attorney at the Watkins Firm has extensive experience in these cases. The primary form of damages are “compensatory” which are intended to recoup the losses experienced as a direct result of the breach as well as the costs required to find another vendor and complete the “benefit of the bargain.” Many contracts specify “liquidated damages” that establish a monetary value for missing a deadline or failing to fulfill one’s obligations under the contract.
Restitution may be required when the breaching party received goods and/or services but did not pay for them. In rare cases where the breach involves some form of fraud or misrepresentation there may be an award of “punitive damages” which are designed to punish the wrong doing and discourage others from doing so in the future.
40+ Years of Experience Resolving Breach of Contract Cases
The experienced contract attorneys at the Watkins Firm bring 40+ years of experience resolving breach of contract cases. We employ a unique approach to disputes which is designed to resolve them quickly and in a cost-effective manner. We are able to resolve the vast majority of our breach of contract cases through effective, leveraged negotiation. This is the fastest and least expensive strategy for resolution.
What will be required in your unique situation to mitigate the damages in a contract breach and protect your options going forward? Your Watkins Firm attorney will represent you at every step in the process, from negotiation through mediation, arbitration and when necessary at trial. We can help you to achieve the best possible outcome and move forward with your business. We invite you to review our Recent Podcast Episode 5 – Breach of Contract as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
