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suffered in consequence of the defendant’s breach of contract. This rule only applies to expenses incurred after breach. Other unreasonable acts will be treated as an intervening cause of the harm suffered. Secondly, the claimant must take such reasonable, positive steps as are necessary to minimise the loss he or she suffers. For example, a wrongfully dismissed employee must attempt to find a comparable job, and where a seller fails to deliver goods, the buyer must go into the market to obtain substitute goods. The rules on mitigation also significantly reduce the likelihood that the claimant will be able to recover in full any expectations of full performance on the part of the defendant which he may have harboured. He/she cannot sit back, do nothing and sue for damages in respect of all the loss he claims to have suffered in consequence of the defendant’s defective performance. Instead, he must take positive steps to reduce his losses by going into the market and seeking a replacement performance, where this is possible. In determining the rules on mitigation, the courts are faced with a conflict between not depriving a party of a legal remedy and not encouraging a wasteful use of resources, taking account, especially, of the fact that it is the defendant’s breach of contract which has placed the claimant on the horns of a dilemma. The innocent party is entitled to reject an offer which requires him/her to surrender his/her right to damages, with the effect that he/she will not be in as good a position as if the contract had been performed. However, he must not act unreasonably in refusing an offer if to accept it would have reduced his/her losses. In Payzu Ltd v Saunders, an instalment contract for the sale of silk
DOI link for suffered in consequence of the defendant’s breach of contract. This rule only applies to expenses incurred after breach. Other unreasonable acts will be treated as an intervening cause of the harm suffered. Secondly, the claimant must take such reasonable, positive steps as are necessary to minimise the loss he or she suffers. For example, a wrongfully dismissed employee must attempt to find a comparable job, and where a seller fails to deliver goods, the buyer must go into the market to obtain substitute goods. The rules on mitigation also significantly reduce the likelihood that the claimant will be able to recover in full any expectations of full performance on the part of the defendant which he may have harboured. He/she cannot sit back, do nothing and sue for damages in respect of all the loss he claims to have suffered in consequence of the defendant’s defective performance. Instead, he must take positive steps to reduce his losses by going into the market and seeking a replacement performance, where this is possible. In determining the rules on mitigation, the courts are faced with a conflict between not depriving a party of a legal remedy and not encouraging a wasteful use of resources, taking account, especially, of the fact that it is the defendant’s breach of contract which has placed the claimant on the horns of a dilemma. The innocent party is entitled to reject an offer which requires him/her to surrender his/her right to damages, with the effect that he/she will not be in as good a position as if the contract had been performed. However, he must not act unreasonably in refusing an offer if to accept it would have reduced his/her losses. In Payzu Ltd v Saunders, an instalment contract for the sale of silk
suffered in consequence of the defendant’s breach of contract. This rule only applies to expenses incurred after breach. Other unreasonable acts will be treated as an intervening cause of the harm suffered. Secondly, the claimant must take such reasonable, positive steps as are necessary to minimise the loss he or she suffers. For example, a wrongfully dismissed employee must attempt to find a comparable job, and where a seller fails to deliver goods, the buyer must go into the market to obtain substitute goods. The rules on mitigation also significantly reduce the likelihood that the claimant will be able to recover in full any expectations of full performance on the part of the defendant which he may have harboured. He/she cannot sit back, do nothing and sue for damages in respect of all the loss he claims to have suffered in consequence of the defendant’s defective performance. Instead, he must take positive steps to reduce his losses by going into the market and seeking a replacement performance, where this is possible. In determining the rules on mitigation, the courts are faced with a conflict between not depriving a party of a legal remedy and not encouraging a wasteful use of resources, taking account, especially, of the fact that it is the defendant’s breach of contract which has placed the claimant on the horns of a dilemma. The innocent party is entitled to reject an offer which requires him/her to surrender his/her right to damages, with the effect that he/she will not be in as good a position as if the contract had been performed. However, he must not act unreasonably in refusing an offer if to accept it would have reduced his/her losses. In Payzu Ltd v Saunders, an instalment contract for the sale of silk
ABSTRACT
The rules on mitigation also significantly reduce the likelihood that the claimant will be able to recover in full any expectations of full performance on the part of the defendant which he may have harboured. He/she cannot sit back, do nothing and sue for damages in respect of all the loss he claims to have suffered in consequence of the defendant’s defective performance. Instead, he must take positive steps to reduce his losses by going into the market and seeking a replacement performance, where this is possible.
