Mitigation

The damage must not be too remote; there must be some limit to the liability of the party in breach. Therefore the Court must have some way of being able to measure whether or not the damage is too remote. The leading case is Hadley v Baxendale (1854) where it was held that the injured party may recover. All those damages which arise fairly and naturally from the breach, or which may reasonably be supposed to have been in the contemplation of both parties when entering into the contract i.e. inevitable damages. Any special damages of which the party in breach was aware when he entered into the contract. In other words, damages which would not perhaps normally arise from a breach of this type of contract but which the defendant knew, in the circumstances, would arise from his breach of this particular contract. The injured party may not recover damages for losses which he could have taken reasonable steps to avoid. Thus, the injured party has a duty to take all reasonable steps to mitigate the loss which is consequent upon the damage he has suffered. It should be noted, however, that he is only under a duty to take reasonable steps. What is reasonable will, of course, depend upon the circumstances of the case. Specific Performance. In some cases the courts may make an order enforcing performance of the contract but of course, some contracts will not be specifically enforceable because of the nature of the obligations and therefore, damages must be awarded. Injunctions An injunction is an Equitable order restraining the defendant from a specified activity, i.e. it may be invoked to prevent the breach of a negative term in the contract.