Enhance your Bar Exam preparation with Themis Bar Exam Quiz. Use hints and multiple choice questions to sharpen your understanding. Excel in your Bar Exam!

Multiple Choice

Which remedy is described as being added to damages from the time of breach?

When a contract is breached, the responsible party has a duty to take reasonable steps to limit the losses this breach causes. The remedy that describes how damages are handled in light of that duty is reduction of damages. In practice, this means the amount awarded for damages is reduced by any amount the nonbreaching party could have avoided with reasonable efforts to mitigate after the breach. This mitigation obligation starts at the moment of breach, so the damages you’re calculating should reflect only those losses that could not have been avoided through reasonable mitigation. This differs from reliance damages, which reimburse expenses made in anticipation of performance; incidental damages, which cover extra costs incurred because of the breach; and liquidated damages, which are fixed sums specified in the contract. The key idea here is the reduction step: damages are lowered to account for what could have been avoided once the breach occurred.

When a contract is breached, the responsible party has a duty to take reasonable steps to limit the losses this breach causes. The remedy that describes how damages are handled in light of that duty is reduction of damages. In practice, this means the amount awarded for damages is reduced by any amount the nonbreaching party could have avoided with reasonable efforts to mitigate after the breach. This mitigation obligation starts at the moment of breach, so the damages you’re calculating should reflect only those losses that could not have been avoided through reasonable mitigation.

This differs from reliance damages, which reimburse expenses made in anticipation of performance; incidental damages, which cover extra costs incurred because of the breach; and liquidated damages, which are fixed sums specified in the contract. The key idea here is the reduction step: damages are lowered to account for what could have been avoided once the breach occurred.