Gregory Crespi, ‘Does Failure to Mitigate Damages Bar Recovery of the Costs of Mitigation?’

ABSTRACT
It is well established that a person who makes reasonable efforts to mitigate her damages after a breach of contract will be able to recover the costs of those mitigation efforts as incidental damages and that a person who fails to make such efforts will be denied recovery of the damages that could have been avoided. But will a person who fails to take reasonable efforts to mitigate damages still be able to recover the probable cost of those mitigation efforts as an offset against the reduction in her damages for failure to mitigate, even though she did not incur those costs? The conventional wisdom among judges and scholars is that mitigation costs that were not incurred by an injured person are not recoverable as an offset or otherwise. In my opinion, however, this conclusion is not justified as a matter of social policy, and arguably is also not required as a matter of positive law, at least under common law if not also under Article 2 of the Uniform Commercial Code (‘UCC’). In this Article, I first consider the proper resolution of this question as a matter of policy. I then review the applicable law, …

Crespi, Gregory S, Does Failure to Mitigate Damages Bar Recovery of the Costs of Mitigation? (2018) Hofstra Law Review, volume 48, no 3, 2018; SMU Dedman School of Law Legal Studies Research Paper No 412.

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