Mitigation rule
Damages are not recoverable for loss that the injured party could have avoided without undue risk, burden, or humiliation. The injured party is not precluded from recovery to the extent that he has made reasonable but unsuccessful efforts to avoid loss.
Any reasonable costs expended by an injured party in mitigating damages may be recovered as incidental damages.
The injured party’s obligation is to incur only slight expense and reasonable effort in mitigating damages. The burden is on the breaching party to prove lack of diligence by the injured party.
Mitigation rule for lost volume sellers
The lost volume seller scenario is an exception where mitigation does not limit the damages that an injured party may receive. The rule gets broken down into a three-prong test:
- (1) the person who bought the resold entity would have been solicited by the plaintiff had there been no breach or resale;
- (2) the solicitation would have been successful; and
- (3) the plaintiff could have performed that additional contract.
