What do you know about mitigation of damages? Did you know that mitigation of loss is your responsibility in almost every scenario involving you and another party? This is especially true of mitigation of damages in contract law.
As an experienced contract litigation law firm, we know that you can be held liable for damages even if you don’t understand your duty to mitigate damages. So, no matter who you are, how low-maintenance your lifestyle is or how infrequently you enter into contracts, you have certain legal responsibilities.
Mitigate Damages Meaning in Contract Law
Before we jump too far down the mitigation of damages rabbit hole, let’s make sure that the mitigate damages meaning is clear. Let’s flip the script for easier understanding too. Let’s say someone does YOU wrong by harming you or your property.
Let’s say someone owns a business suite right above yours and their toilet starts to overflow. That person has a water damage mitigation obligation—period. Whether they realize it or not, they must attempt to stop the leaky toilet that they own from damaging the property owner’s flooring, wiring, insulation, and other real property. Afterall, how angry would you be if they just let it keep overflowing all over your business, threw their hands up in the air and left for the night at 5 p.m.?
When a wrongdoing has been committed at your expense (such as failing in their water damage mitigation responsibility), the value of the loss or harm that you experience is known as damages.
Sometimes, that figure is fairly easy to ascertain (for example, if you loan someone $5 and they fail to pay it back – you are out $5). Sometimes, that figure is tricky to ascertain (for example, someone harms your reputation, and you’re not sure quite how much loss it will cause your business over the coming months).
Mitigation of Loss: What We Owe to Each Other
Each individual and entity has a duty to mitigate damages — or try to stop or reduce damages from continuing to happen once they start to occur.
This is what we owe to each other — our unspoken but deeply understood duty to one another. Children understand this concept. Imagine two children are playing in their neighborhood with a water hose and a third child walks past them carrying several books. The spray of water begins to get the third child’s books wet. The first two children know to stop spraying their friend’s books as soon as they see they are causing harm. But if the child holding the hose is a bully, they might laugh and just let the water keep flowing all over the book. Right?
Mitigation of damages is universally understood and mutually agreed about by most people in a society even aside from the law.
This is known as the duty to mitigate damages. And it’s a significant aspect of contract law and at the root of many lawsuits handled by this firm.
Mitigation of Damages: Victim Responsibilities
Here’s another example that is even more layered. If someone throws a baseball through my window, I will have a reason to go after them for my damages. It’s well understood that the ball thrower would be responsible for the cost of repairing the window, my cleanup expenses, and the replacement for anything else that was damaged in my home when the ball came flying through, etc., but in this scenario, what is MY responsibility now that the initial damage has been done?
If I have a hole in my window and I know a big rainstorm is coming, it is now MY duty to put up a tarp over the window, get the repair person out to fix the glass right away, etc. I cannot simply stand by and let water pour into my house through the window and then try to sue the person who threw the ball for the water damage on top of the damage from the initial incident. Nor should I expect an insurance company to cover the new damages created by my failure to mitigate damages. The ball thrower has the obligation to pay for the harm they cause, but I have a duty to make sure it does not get worse.
I can’t hold the ball thrower responsible for my failure to try to help the situation not turn into a disaster.
As with damages, mitigation of damages can be fairly simple (like the ball-through-the-window example) or more complex. You should always be sure to document throughout the process, keep receipts, take photos where applicable, etc. But once you have been harmed, you must take reasonable steps to try to prevent that harm from worsening.
Complex Damage Mitigation Cases Require a Skilled Litigation Attorney
As you can see, when it comes to mitigation of damages and mitigation of loss, much of the law is based in common sense concepts that we all understand deep down.
We recommend that you contact an attorney right away to discuss your situation. Perhaps you want to know whether you fulfilled your duty to mitigate loss. Perhaps you think someone else should pay damages to you because they failed to mitigate damages that were their responsibility.
The duty of mitigation does not require you to move heaven and earth to stop spreading damage, but you must take reasonable steps along the way, or you run the risk of the person you sue claiming that the amount they owe you should be reduced or even eliminated based on your failure to adequately mitigate your own damages.
If you have questions about the duty to mitigate damages or how it applies to your specific situation, it’s crucial to seek professional legal advice. Understanding your rights and responsibilities can make a significant difference in the outcome of your case. Contact us today to schedule a consultation, and let us help guide you toward the best possible resolution for your case.
