Avoidable consequences and mitigation of damages - Next Generation Bar Exam

1. What costs of an unsuccessful but reasonable mitigation attempt may the plaintiff recover?

   The reasonable costs of the attempt. A plaintiff who acts reasonably is protected even if the effort to reduce loss fails.

2. An owner repudiates a construction contract midway, but the builder keeps working. Which construction costs are recoverable?

   Only costs incurred before the builder learned of the repudiation, plus lost profit. Costs incurred after notice of repudiation are avoidable consequences and are excluded.

3. What amount is deducted from a wrongfully discharged employee's damages?

   What the employee earned, or with reasonable effort could have earned, from substantially similar work. Refusing comparable available work reduces damages by the amount the employee could have earned.

4. A wrongfully discharged teacher declines an offered job as a school janitor. What effect does the refusal have on damages?

   It has no effect, because the janitorial job is not substantially similar employment. Mitigation requires accepting only work comparable in kind and status to the lost position.

5. When does a substitute transaction not reduce the plaintiff's damages?

   When the plaintiff could have made the substitute transaction even without the breach. A lost-volume seller, for example, would have made both sales, so the resale does not offset the lost profit.

6. What effect does a failure to mitigate have on the plaintiff's claim?

   It bars recovery only of the losses that could have been avoided. The plaintiff still recovers damages that reasonable mitigation would not have prevented.

7. Under UCC 2-704, what may an aggrieved seller do with unfinished goods when the buyer repudiates?

   Complete manufacture and identify the goods, or stop and salvage them, using reasonable commercial judgment. The seller's choice must be made to minimize loss; either option is protected if reasonable.

8. Which party bears the burden of proving that the plaintiff failed to mitigate?

   The breaching party. The defendant must show both that mitigation was possible and what the plaintiff could have saved.

9. What employment must a wrongfully discharged employee accept to mitigate damages?

   Substantially similar employment in the same locality. The employee need not accept work that is different in kind or inferior in rank or conditions.

10. What does the doctrine of avoidable consequences provide?

    A plaintiff cannot recover losses it could have avoided by reasonable effort without undue risk, burden, or humiliation. The doctrine limits damages; it does not impose a duty enforceable by a separate claim.

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