Understanding the "Mitigation of Damages" Doctrine

Claimants who suffer damages due to the acts or omissions of another cannot, in most instances, just sit back and allow such costs and damages to accrue.  Rather, claimants must take steps, including ordinary care and reasonable diligence, to reduce or eliminate their damages.  Such steps are known as the duty to mitigate damages or the doctrine of avoidable consequences.  Simply put, a claimant must act like an ordinary, reasonable person would do under similar circumstances.  In the event a claimant fails to mitigate its damages, this can be a defense to some or all of the damages sought by the claimant with respect to both contract and tort claims.

There are multiple examples of the duty to mitigate with respect to both contract and tort claims.  A landlord must attempt to lease a rental property even if the tenant breached the lease and abandoned the property.  An injured party must seek medical attention in a timely manner, even if the party causing the injury is solely at fault.  A property owner must take timely steps to avoid  further damage resulting from construction defects, even where a contractor refuses to repair the defect.  An injured party must return to work upon being cleared to do so, and cannot refuse to work simply to increase the damages sought to be recovered.  A purchaser of goods, must seek to obtain goods from an alternative source, even if the original seller failed to deliver as promised. In each of these instances, it could be argued the claimant aggravated its damages by failing to “mitigate” by taking reasonable actions to avoid further damages or injuries.

However, there are limits upon the duty of a claimant to mitigate its damages. For example if a claimant suffers injuries prohibiting taking actions to reduce damages, mitigation is not required.  If a claimant cannot afford the costs required to mitigate its damages, then the resulting damages will not be reduced. If mitigation would require the claimant to take unreasonable or dangerous efforts, the failure to reduce resulting damages would not be required.  Finally, some states, including Georgia, do not require a claimant to mitigate its damages in the case of intentional and continuous torts.  In mitigating damages, the claimant need only take reasonable actions that a reasonable person would take.  In other words, mitigation efforts are measured by the yardstick of reasonableness.

The rationale behind the duty to mitigate appears to be rooted in the concept of causation. In both breach of contract and tort cases, wrongdoers are held liable for damages caused by their acts and omissions.  However, if a claimant fails to comply with its duty to mitigate, the claimant is typically found to be responsible for at least a portion of the damages sought to be recovered from the wrongdoer. In such cases apportionment of causation and damages are then left to the fact finder to identify.  Consequently, claimants should always take reasonable steps to mitigate and reduce the nature and extent of their damages, or else face the risk of being held responsible for causing their own losses.