We are often asked “Why are we required to mitigate damages in breach of contract? We aren’t the ones who are responsible for the breach.”
The law here in San Diego and throughout California requires 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
- negotiate 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
- seeking 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.
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 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 the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
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.