According to the “Mitigation of Damages” doctrine, victims in the United States are responsible for minimizing or avoiding (or mitigating) damages – even if they were not responsible for causing the initial harm in the first place.
Mitigation of damages comes in to play most often in contracts, but it can also play a significant role in accident or personal injury law. According to California Civil Jury Instructions Series 358 (c/o Justia)
If the defendant breached the contract and the breach caused harm, [name of plaintiff] is not entitled to recover damages for harm that [name of defendant] proves [name of plaintiff] could have avoided with reasonable efforts or expenditures. You should consider the reasonableness of [name of plaintiff]’s efforts in light of the circumstances facing [him/her/it] at the time, including [his/her/its] ability to make the efforts or expenditures without undue risk or hardship.
So, enough with the legalese, what does that really mean?
Mitigation of Damages in Contracts
Specifically, it applies to breach of contract cases. When one party breaks a contract, harming the other party financially, that person or party still has a responsibility to try and reduce their financial loss. For example, say the plaintiff in a breach of contract case had an agreement to make fifty dining room chairs at $100 a piece for the defendant. At the last minute, however, the defendant backs out of the deal, breaching the contract and leaving the plaintiff with $5000 worth of unsold chairs.
If the plaintiff mitigates his or her damages and sells the chairs to someone else at market value, but that value is significantly lower than expressed in the contract – say, $50 per chair – then the plaintiff would likely be able to recover the difference.
However, what if the plaintiff instead sits on the inventory, does not mitigate their damages, then attempts to sue the defendant for the full $5000? He or she would most likely only be entitled to the value of what they could have recouped by selling them, thus forfeiting the other half of the sum because they failed to mitigate their damages.
Mitigation of Damages in Personal Injury Cases
While damage mitigation is much more common in breach of contract cases, it does apply to may personal injury cases as well. As the text from the jury instructions stated above, personal injury plaintiffs are not able to recover damages for injury that they could have reasonably mitigated of avoided.
Failure to seek medical attention – Deciding not to have surgery -Going against medical advice: Not seeking medical attention or not listening to it, can significantly impact the value of a settlement or verdict. Accident victims are not able to recover full damages in any of these cases.
Seeking and using alternative treatments: If an accident victim seeks alternative treatments that prolong the injury or make it worse – especially without seeking proper medical treatment first – they may also be found to have not properly mitigated their damages. This can be homeopathy, acupuncture, chiropractic and many other holistic methods.
Failure to seek employment: Lost wages are big part of personal injury cases, but if a victim is able to work but fails to look for it, they are unable to recover damages for those lost wages.
In all these cases, however, it’s important to remember that the injured party must take “reasonable” steps to mitigate their damages. There are many instances where it is not reasonable to seek medical attention or employment, just as it may not always be possible to sell off inventory in a breach of contract case. Each case is different, and an attorney should be consulted if you have an issue that may potentially involve the mitigation of damages doctrine.
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