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S. J. Groves & Sons Co. v. Warner Co. - 576 F.2d 524 (3d Cir. 1978)

Rule:

The requirement of cover or mitigation of damages is not an absolute, unyielding one, but is subject to the circumstances. The test of proper cover is whether at the time and place the buyer acted in good faith and in a reasonable manner, and it is immaterial that hindsight may later prove that the method of cover used is not the cheapest or most effective. Essentially the cover rules are an expression of the general duty to mitigate damages and usually the same principals apply. The burden of proving that losses could be avoided by reasonable effort and expense must be borne by the party who has broken the contract. Pa. Stat. Ann. tit. 12A, § 2-712

Facts:

Plaintiff was awarded a subcontract for placement of a bridge's concrete decks and parapets. Plaintiff contracted with defendant for the delivery of ready-mixed concrete. Plaintiff alleged that defendant failed to deliver adequate supplies at scheduled times and, as a result, plaintiff had extensive losses. The trial court, finding that the plaintiff had an obligation to utilize another entity as a supplemental supplier, did not award the plaintiff all the delay damages it sought. Plaintiff appealed.

Issue:

Did plaintiff have the obligation to mitigate the damages caused by the defendant, thereby justifying the award of only partial damages?

Answer:

No.

Conclusion:

The Court held that where both plaintiff and the defendant have had equal opportunity to reduce the damages by the same act and it was equally reasonable to expect the defendant to minimize damages, the defendant was in no position to contend that the plaintiff failed to mitigate. Nor will the award be reduced on account of damages the defendant could have avoided as easily as the plaintiff. In the case at bar, the Court held that the alternative available to the plaintiff was available to the defendant as well; hence, the defendant was the one responsible for taking action. Thus, the case was remanded for an assessment of damages for defendant’s failure to procure an additional supplier.

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