ACCA LW · Chapter 4 · Question 5 of 10
Which of the following best describes the innocent party's duty to mitigate loss after a breach of contract?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The innocent party must take reasonable steps to minimise the loss and cannot recover loss that such steps would have avoided
Explanation
The innocent party cannot recover damages for loss that could have been avoided by taking reasonable steps (British Westinghouse v Underground Electric Railways). The standard is reasonableness, not every possible step. In Payzu v Saunders it was reasonable to accept the defaulting seller's offer of cash terms, but this depends on the circumstances, and the duty applies whether or not the breach was deliberate.
More Breach of contract and remedies MCQs
- Q7An actress contracted exclusively with a film company and agreed not to act for any other company during the contract. She left to work…
- Q8An author was engaged to write a book for a series, and after he had done part of the work the publisher abandoned the series. What remedy…
- Q9Under the Limitation Act 1980, what is the normal limitation period for an action for breach of a simple contract?
- Q10Which of the following statements about damages for breach of contract is correct?
- Q1Before the date for performance, one party clearly states that it will not perform its obligations. What is this called and what may the…