Mitigation and Fairness

Abstract

The doctrine of mitigation in contract law limits the recovery of damages available to the innocent victim of a breach of contract to cover only those losses that would have been incurred had the promisee acted reasonably in avoiding or not exacerbating the losses caused by breach. The doctrine has troubled ‘promise theorists’ who fail to see why the guilty party should not in such circumstances be responsible for all the losses that, after all, her own wrongdoing has caused. Charles Fried attempted to accommodate the doctrine by linking promise to the principle of altruism but that attempt has faced important criticisms; which reflect a deeper failure on Fried’s part to perceive that contractual relations involve an invocation of a ‘thinner’ type of trust than is usually found when promises take place in the context of close or intimate relationships. This chapter claims that the doctrine only makes sense if we recognize that it reflects the interaction between the promise principle and a principle of fairness that we find as a matter of first-order moral reasoning. On this view, contract law mirrors what we find in promissory morality (broadly conceived). It is another example of a ‘composite doctrine’ reflecting the interaction between multiple moral concerns.