What is meant by duty to mitigate losses?

The duty to mitigate losses, also known as the duty to mitigate damages, is a legal principle that requires a party who has suffered harm or losses to take reasonable steps to minimize or mitigate those losses. In the context of contractual or tortious disputes, this duty reflects the idea that a person who has experienced harm should not allow the damages to escalate by failing to take reasonable actions to reduce or prevent further harm.

Key aspects of the duty to mitigate losses include:

Reasonable Efforts: The duty to mitigate requires the injured party to make reasonable efforts to limit or minimize the extent of the harm suffered. This may involve taking actions that a reasonable person in a similar situation would consider appropriate.
Acting Prudently: The injured party is not expected to go to extraordinary lengths to mitigate damages, but they are expected to act prudently and reasonably under the circumstances.
Prompt Action: Mitigation efforts should be undertaken promptly after the harm is incurred. Delaying or neglecting to take reasonable steps may be viewed as a failure to fulfill the duty to mitigate.
Foreseeability of Damages: The duty to mitigate is tied to the principle of foreseeability. The injured party is generally expected to foresee and anticipate potential damages and take steps to prevent them.
Failure to Mitigate and Damages Reduction: If a party fails to fulfill the duty to mitigate, the law may reduce the damages awarded to them. The rationale is that the party should not recover damages for losses that could have been avoided through reasonable efforts.

Understanding and fulfilling the duty to mitigate losses is essential for parties involved in legal disputes, as it can influence the determination of damages and the overall outcome of the case.