What is the test for a trial judge to determine whether a party has taken steps to avoid any losses from a breach of contract?
British Columbia, Canada
The following excerpt is from Zazkis v. Golden Spirit Minerals Ltd., 2005 BCSC 638 (CanLII):
As our Court of Appeal noted in Webster v. Ernst & Young (No.1), (2000), 75 B.C.L.R. (4th) 340 (B.C.C.A.), it is necessary for the trial judge to “estimate the possibilities” “arising on the evidence”. While it is the right of the plaintiff to recover all of his losses which are reasonably contemplated by the parties as liable to result from the breach, the party who has suffered from a breach of contract must take all reasonable steps to avoid such losses. In applying this general assessment to the case of shares, the touchstone is the test of “reasonableness” and what is reasonable will change with the factual matrix of the case.
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