Contracts & ExecutionQuestion 807 of 1605
After a contractor breaches, the owner has a legal 'duty to mitigate' damages, which means the owner must:
a.Immediately sue for the full contract price
b.Refuse all offers from replacement contractors
c.Take reasonable steps to minimize the losses caused by the breach
d.Wait for the contractor to voluntarily fix everything
Explanation
The duty to mitigate requires the injured party to take reasonable steps to limit their losses after a breach, such as hiring a reasonable replacement contractor. Damages that could have been reasonably avoided are not recoverable. The owner need not act unreasonably or incur great expense, but sitting idle and letting losses pile up, or refusing reasonable replacements, can reduce the damages a court will award.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)