After an absolute repudiation or refusal to perform by one party to a contract, the other party cannot continue to perform and recover damages based on full performance. The plaintiff must, so far as he can without loss to himself, mitigate the damages caused by the defendant's wrongful act.
Board of commissioners (Board) of defendant county awarded plaintiff company a contract to construct bridge. Board subsequently adopted resolution declaring that contract was not valid, notified plaintiff of resolution, and directed plaintiff to halt construction. Plaintiff continued construction and filed suit against defendant for breach of contract, seeking damages for work performed after notice of cancellation. Trial court awarded plaintiff full amount of claim.
Is there a duty by a non-breaching party to mitigate damages resulting from the breach of contract by the other party?
The court reversed. The court held that answer to complaint filed by three commissioners admitting liability was not properly admitted into evidence, because commissioners had not acted at a regularly held meeting of the Board. The court held that trial court erred in awarding plaintiff full amount of claim, because plaintiff had duty to mitigate damages once it knew of cancellation. The court held that plaintiff should be compensated for labor and materials expended until time of breach, plus profits plaintiff would have realized.