Question

Speedy Deliveries delivered an envelope two days later than they had promised in their courier services contract. Unbeknownst to Speedy, the envelope contained important title documents and their client now alleges the late delivery caused a real estate deal to fall through and is suing Speedy for the $200,000 profit it had expected to make from the deal. Which statement describes the most likely outcome?

Select one:

a. The damages will not be recoverable because they are pure economic losses.

b. The damages will likely be regarded as a natural consequence of a contract breach.

c. The claim will likely fail because the damages are too remote.

d. The damages cannot be recovered from Speedy because the plaintiff has failed to mitigate.

Answer 1

Dear Student,

Please find below answer to your questions

Abstract

As per the Contract of Law : Breachee who refuses to mitigate will not be able to recover full expectation damages. They can only recover expectation MINUS what would have been saved had they mitigated.

This is the law‘s which give more imphasis on the attempting to prevent waste , Important to understand this concept vis-à-vis efficient breach

Failure to Mitigate the Damages is a Defense for Breach of Contract. If the company fails to do so, the Judge should instruct the jury that “A plaintiff cannot be compensated for damages which he could have avoided by reasonable effort or expenditures.

Failure to mitigate damages can impact a personal injury claim because it may reduce the amount of compensation that you receive. If there is a genuine issue of whether you failed to mitigate damages, you may receive a lower settlement or a lower award at trial.

However, the defense may not have a sound basis to claim that you didn’t take reasonable steps to reduce your losses. If they claim without having the evidence to back it up, you should be prepared to respond aggressively to ensure that you get the compensation that you deserve.

Hypothetical Example- Shipper brings perishables to a dock, leaves them there when carrier fails to show. Duty to mitigate means shipper must try and sell call a different carrier, even a more expensive one (and recover the difference) rather than just letting the fish rot.

Solution to Case Study

Therefore Option a. The damages will not be recoverable because they are pure economic losses is incorrect because of root cause is Plaintiff has failed to mitigate losses.

Therefore Option b. The damages will likely be regarded as a natural consequence of a contract breach is incorrect because of root cause is Plaintiff has failed to mitigate losses.

Therefore Option c. The claim will likely fail because the damages are too remote is incorrect because of root cause is Plaintiff has failed to mitigate losses.

Therefore Option d. The damages cannot be recovered from Speedy because the plaintiff has failed to mitigate is Correct because it is the provision of the law we should take atmost care to have the mitigation of risk where there are probability of failure.

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