You are required to mitigate your losses in a breach of contract if you are the victim of a breach of contract.  The failure to take prudent, reasonable and timely action to mitigate the damages can substantially reduce or eliminate the responsibility of the breaching party to fairly compensate you for what has happened.  This is why it is important to contact the Watkins Firm as soon as possible after any breach of contract occurs regardless of your position in the agreement.

What is “mitigating the damages” under California law?  The party who has not caused the breach is required to take “prompt, reasonable and prudent action” to reduce the financial and business impact of the breach of contract on their company, and any resulting damages which may result from the breach.  You are required to mitigate your losses in a breach of contract in a timely and comprehensive fashion in order to protect your legal rights as you pursue a breach of contract action.  Mitigating the damages allows you to recover the maximum amount in a breach of contract dispute and prevents the other party from using this as a defense against their breach of contract.

Damages are simply the documentable financial losses that you or your business have incurred as a result of the breach of contract.  You are required to mitigate your losses in a breach of contract in order to preserve your ability to recover damages, though this is often the last thing on the mind of a business owner who has been disappointed by a contract partner.  However, this important step is the key to ensuring the maximum recovery in any breach of contract mediation, arbitration or business litigation.

Pro-Tip: “Mitigating the damages is an obligation if you are the victim of a breach of contract in California. A lot of people get hurt or damaged by someone who breaches a contract. And then they go with this attitude that, ‘well, since they are responsible for the breach, (the other party) owes us money,’ and they don’t try to mitigate their damages. I mean, doing things that would make them not suffer as much from the breach of contract or other types of causes of action.

And what happens in the law is a judge or a jury will hear what you did and you’ll think you’re gonna get $300,000 in trial, but they’ll decide that you failed to perform your obligation to mitigate the damages, to do everything you could to lessen the amount of damages you suffered.  And the party that fails to mitigate the damages will receive far less than they would have otherwise, often nothing at all.” – Dan Watkins, Founding Partner

The experienced breach of contract attorneys at the Watkins Firm have more than four decades of experience in these disputes, and provide timely guidance to our clients to help them to protect their position, while ensuring that they have taken all actions required by law.  If you are concerned about a breach of contract 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.