We are often asked “What is required to mitigate damages in breach of contract?” Are you the victim of a business breach of contract? You may not be responsible for the breach, but you do have responsibilities under the law to protect your interests and preserve your right to purse appropriate damages from the breaching party.
The law here in San Diego and throughout California requires the victim of a contract breach (the non-breaching party) to take reasonable, timely and prudent measures to mitigate or reduce the extent of the damages caused by a breach of contract. Some of the actions you can take to mitigate damages include:
- searching for other vendors to fulfill the original terms of the agreement
- negotiations with your own customers who may be affected by the breach of contract
- negotiations with the breaching party to allow necessary time to deliver on the agreement or provide appropriate compensation for the damages you have been forced to bear
- Maintain documentation of all discussions prior to contract signing, and correspondence with breaching entity in the aftermath
- Document every action and expense associated with mitigation
- seek the advice of the experienced business contract attorneys at the Watkins Firm
The injured party (victim of a breach of contract) is required to mitigate damages to demonstrate good faith as part of the original agreement. The key is take immediate, prudent action to limit your losses where possible, and to begin negotiations on several fronts. Your Watkins Firm attorney can help to identify what is required to mitigate damages in a breach of contract as well as documentation efforts and communications with the breaching party.
The failure to mitigate damages can limit (or prevent) your ability to receive a financial recovery during a breach of contract dispute. The party responsible for the breach can use a failure to mitigate damages as a successful defense in an attempt to relieve them of their resulting financial obligations.
You cannot legally force a company or individual to comply with a contract, except in situations involving real estate. The legal recourse in the vast majority of breach of contract cases is recovery of associated financial damages.
We invite you to review our 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.
Your Watkins Firm attorney can help to identify what is required to mitigate damages in a breach of contract and the steps to accomplish this reasonable, prudent task. We will discuss your objectives for this situation, and the impact the breach may have on your business. We will guide you to help mitigate damages while preserving all legal and financial remedies possible. We are also able to represent you at every step of the process including negotiations, mediation, arbitration, and ultimately through business litigation.
