When one party breaches a contract, the non-breaching party often suffers financial losses or other forms of harm
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When one party breaches a contract, the non-breaching party often suffers financial losses or other forms of harm. However, under Colorado law—and most contract law principles—those losses can’t simply be left to grow unchecked. The injured party has a legal duty to mitigate damages wherever reasonably possible. In other words, if someone breaks a contract with you, you can’t sit back and allow the losses to pile up, then expect to recover every penny from the breaching party.
Understanding the duty to mitigate is essential whether you’re bringing a breach of contract claim or defending against one. A qualified Denver breach of contract lawyer can help you navigate this concept, protect your rights, and build a strong case—whichever side of the dispute you’re on.
Mitigation refers to the legal obligation of a non-breaching party to take reasonable steps to reduce or avoid further losses resulting from the breach. This doesn't mean you must go to extreme lengths or incur significant costs to avoid damages—but you do have to act prudently and in good faith.
For example, let’s say a contractor backs out of a building project halfway through construction. The property owner can't simply stop the project and sue for every delayed profit or lost opportunity. Instead, the owner must try to hire a replacement contractor and keep the project moving. Failing to do so could significantly reduce the amount recoverable in court.
Mitigation helps ensure fairness in the legal process. The law recognizes that it would be unjust to allow someone to recover damages they could have reasonably avoided. Colorado courts will often scrutinize a plaintiff’s actions after a breach to determine whether they made efforts to minimize their losses.
If the court finds that the plaintiff failed to mitigate damages, it may reduce the compensation awarded—even if the defendant clearly breached the contract. That’s why both plaintiffs and defendants should work with an experienced Denver breach of contract lawyer to evaluate mitigation issues early on.
Here are a few real-world examples where the duty to mitigate can play a major role:
Employment Contracts
If an employer breaches an employment contract by terminating an employee early, the employee must make reasonable efforts to find a similar job. If the employee refuses to look for work or turns down comparable opportunities, any damages awarded may be reduced.
Commercial Leases
If a commercial tenant breaches a lease by vacating early, the landlord must try to re-rent the space. They cannot simply let the property sit vacant and sue for the entire remaining lease term without attempting to reduce the financial impact.
Vendor Agreements
If a supplier fails to deliver goods as agreed, the buyer must try to find a substitute supplier rather than halting business operations entirely. The buyer may then sue for the difference in cost—but not for avoidable losses caused by inaction.
What’s reasonable depends on the circumstances of each case. Courts will consider:
The nature of the breach
The foreseeability of damages
The availability of alternative solutions
The time and cost required to mitigate
The injured party’s knowledge and ability to respond
For instance, a business that relies on a specific vendor for a unique product may not be able to easily switch suppliers overnight. On the other hand, if comparable services or goods are widely available, the duty to act quickly becomes more pressing.
Your Denver breach of contract lawyer can help demonstrate that your efforts to mitigate were reasonable—or challenge the opposing party’s failure to do so.
Let’s say you’ve suffered $100,000 in losses due to a contract breach. If the court finds you could have reasonably reduced those losses by $30,000 through proper mitigation efforts, your final award may be reduced to $70,000.
Importantly, the burden of proof is on the breaching party to show that the non-breaching party failed to mitigate. The defendant must present evidence that:
1. The plaintiff could have taken specific steps to reduce damages
2. Those steps were reasonably available and practical
3. The plaintiff failed to take those steps
4. As a result, the plaintiff’s damages were unnecessarily increased
An experienced Denver breach of contract lawyer can either build a strong defense based on these arguments or counter them effectively if you’re the one bringing the claim.
If you’ve been harmed by a breach of contract, follow these best practices to support your claim:
Document Everything: Keep a record of all communications, contract terms, and losses.
Act Promptly: Don’t delay in seeking alternatives or responding to the breach.
Seek Professional Help: Get legal advice before making major decisions.
Track Your Efforts: If you attempt to find a new supplier, employer, tenant, or contractor, keep detailed records to show your efforts.
These actions help preserve your right to full compensation and show the court that you took your duty seriously.
Mitigation of damages can be a make-or-break factor in any contract dispute. Whether you're pursuing a claim or defending against one, a skilled Denver breach of contract lawyer can help you:
Understand your obligations and rights under Colorado law
Collect and preserve key evidence
Evaluate the reasonableness of your actions or those of the opposing party
Present a strong case in negotiations, mediation, or court
Mitigation issues are often subtle and fact-specific, and mistakes can cost you thousands. Working with a lawyer who knows how Denver courts treat these cases gives you a critical advantage.
Mitigating damages is more than just a legal technicality—it's a fundamental principle of fairness in contract law. If you're involved in a contract dispute, don't assume that a clear breach guarantees full compensation. Instead, work with a knowledgeable Denver breach of contract lawyer to ensure that your case is both legally sound and supported by strong evidence of reasonable action.
Whether you’re seeking to recover losses or defend your position, understanding mitigation is a key step toward protecting your business, finances, and legal interests.
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