The Rule of Mitigation in Contract Law
Date Issued
2015
Date
2015
Author(s)
Kung, Shu-Yun
Abstract
As a typical rule of Common law, the rule of mitigation founded on the theory of social economic benefit. The rule of mitigation requires a plaintiff, after an injury or breach of contract, to make reasonable efforts to alleviate the effects of the injury or breach. If the defendant can show that the plaintiff failed to mitigate damages, the plaintiff’s recovery may be reduced. Although the rule has set the duty to mitigate on the part of plaintiff, the fundamental purpose of this rule is to encourage the plaintiff to conduct self- rescue, and in consistent with promoting the economic benefits and reducing property waste. From the international perspective, the rule of mitigation has been adopted by several international conventions, and even some of the Civil law countries has stipulated the rule of mitigation, such as the Article 119 of the Contract Law of PRC. However, during the transplantation of mitigation into Civil law system several problems have arisen. Firstly, how to settle the content of mitigation in the form of statute law comprehensively and accurately. Secondly, how to deal with the conflict between the rule of mitigation and the traditional principles in Civil law. In order to solve questions above- mentioned, this thesis try to analyse a series of cases in Common law and summarise the comprehensive rules of English and American judicial practice in the use of Mitigation, and also the experience in dealing with the conflict between Mitigation and the anticipatory repudiation. This thesis comprises six chapters. The first chapter briefly introduce the research motivation and method. In the second chapter, author focuses on the origin, the main content and the theory basis of the rule of mitigation. As has mentioned above, the theory basis of Mitigation is the theory of social economic benefits and also the principle of good faith. The third chapter illustrates the meaning of reasonable steps in Common law system and accordingly sets up a standard named “reasonable person standard”, which takes the plaintiff’s personal experience, capacity into account when considering whether the conduct of plaintiff after the breach is reasonable. Furthermore, the other objective factors, including costs, legal rights and benefits, market factors and the character of contract, should also be taken into consideration. This chapter also introduce the two different ways of England and America in dealing with the conflict between Mitigation and the anticipatory repudiation, namely the theory of “substantial and legitimate interest” and “uncompensated loss”. The fourth chapter firstly states the necessity of transplanting the rule of mitigation into Chinese civil law system and the improvement of Article. 119. Then pointing out that the phrase of “reasonable conducts” under Article 119 can also be interpreted by the “reasonable person standard”. Under the Chinese contract law, the use of Mitigation should be permitted under the circumstance of anticipatory repudiation with a certain extent of restriction. The last part of this chapter states that the rule of mitigation may be used to limit the election of specific performance, and even the whole remedies for breach by the plaintiff. In the fifth chapter, the author illustrates the necessity to adopt the rule of mitigation into Taiwanese civil law system and also how to adjust the applying boundary of this rule in order to protect the spirit of good faith and the right to select specific performance from the erosion of Mitigation. The last chapter of this thesis is the conclusion.
Subjects
the rule of mitigation
reasonableness standard
anticipatory repudiation
specific performance
contributory negligence
social economic benefits
the good faith principle
SDGs
Type
thesis
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