Also known as: avoidable consequences rule · doctrine of avoidable consequences · mitigation of damages · avoidable consequences doctrine
Written by attorneys — see sources below.
2 senses
A damages limitation principle that prevents recovery for losses the injured party could have avoided through reasonable efforts undertaken without undue risk, burden, or humiliation. The rule treats reasonable mitigation expenditures as recoverable even when those efforts ultimately fail to reduce the loss.
When tortious conduct confers a special benefit on the very interest harmed, the value of that benefit offsets damages to the extent equity permits.
A damages limitation principle that prevents recovery for losses the injured party could have avoided through reasonable efforts undertaken without undue risk, burden, or humiliation. The rule treats reasonable mitigation expenditures as recoverable even when those efforts ultimately fail to reduce the loss.
Rhea Reynolds, an established film actress, was terminated from a lead role in a musical production. The studio offered her a supporting part in a Western that required different skills and paid substantially less. Reynolds declined the offer and sued for lost wages. Because the substitute role was not substantially similar, her refusal does not reduce the damages recoverable for the original breach.
When tortious conduct confers a special benefit on the very interest harmed, the value of that benefit offsets damages to the extent equity permits.
Each sense below has its own examples, sources, and questions.
Plaintiff Shirley MacLaine Parker, a well-known actress, entered into a written contract with defendant Twentieth Century-Fox Film Corporation dated August 6, 1965, under which she was to play the female lead in the contemplated motion picture production of 'Bloomer Girl'. The contract specified that defendant would pay plaintiff a minimum guaranteed compensation of $53,571.42 per week for fourteen weeks commencing May 23, 1966, for a total of $750,000. The production was to be a musical filmed in California. On April 4, 1966, defendant notified plaintiff by letter that it had decided not to produce 'Bloomer Girl' and would not comply with its obligations under the contract. In the same letter, defendant offered plaintiff the leading role in a different film tentatively entitled 'Big Country, Big Man,' which was to be a dramatic western-type motion picture produced in Australia with identical compensation. The substitute offer eliminated or impaired plaintiff's rights to approve the director and screenplay that had been included in the original contract, and it did not require a dance director. Plaintiff was given one week to accept the substitute offer, but she did not do so and the offer lapsed. Plaintiff commenced this action seeking recovery of the agreed guaranteed compensation, setting forth causes of action for money due under the contract and for damages resulting from defendant's breach. In its answer, defendant admitted the existence and validity of the contract, that plaintiff had complied with all conditions and stood ready to perform, and that it had breached and anticipatorily repudiated the contract, but denied that any money was due and asserted as an affirmative defense that plaintiff had deliberately failed to mitigate damages by unreasonably refusing the substitute employment offer. Plaintiff moved for summary judgment under Code of Civil Procedure section 437c, which the trial court granted, entering judgment in plaintiff's favor for $750,000 plus interest. Defendant appealed from the summary judgment to the Supreme Court of California.
View case2 common questions
No. When a party makes reasonable efforts to reduce loss after a breach or tort, the costs of those efforts remain recoverable even if the efforts fail. The rule limits only losses that could have been avoided, not the expense of reasonable attempts to avoid them.
Supporting sources
The rule does not impose a duty on the landlord to relet when the lease is silent. The landlord may continue to demand rent for the balance of the term or accept surrender. Either choice determines whether future rent is owed.
Supporting sources
Ryan Roberts's negligent excavation undermined the foundation of Rebecca Ross's adjacent warehouse, requiring $180,000 in repairs. The same excavation incidentally improved drainage on Ross's lot, raising its market value by $45,000. The court reduces Ross's net recovery by the amount of the drainage benefit because the improvement directly affects the same property interest harmed by the tort.
1 common questions
The value of the benefit is credited against damages to the extent equity requires. The offset applies only to the interest directly affected by the tortious conduct.
Supporting sources