Do I have to try to reduce my losses after a contract is breached in Ontario?
Yes. Ontario law imposes a duty to mitigate on a party who suffers a contract breach. This means you must take reasonable steps to reduce your losses rather than standing by and letting them grow, expecting the breaching party to cover everything.
What counts as reasonable mitigation depends on the circumstances. If a supplier fails to deliver goods, you may need to source them from an alternative supplier at market rates. If a tenant abandons a lease, the landlord is generally expected to make genuine efforts to find a replacement tenant. If an employer wrongfully terminates an employee, the employee must search for comparable employment.
Courts do not demand heroic or unreasonable efforts. If reasonable mitigation steps were unavailable, too expensive, or genuinely futile, you are not penalized for failing to take them. The burden of proving that you failed to mitigate rests on the party in breach, not on you.
Where you do mitigate successfully, any savings you realize will typically reduce the damages the breaching party must pay. Mitigation benefits both sides — it limits overall loss and keeps claims realistic.
Key takeaways
- You must take reasonable steps to limit your losses after a breach.
- Failure to mitigate can reduce the damages you can recover.
- The breaching party bears the burden of proving you failed to mitigate.
- Courts require reasonable efforts, not heroic or impossible ones.