The party receiving compensation may argue against the principle that there is no obligation to reduce the loss through compensation. Indeed, courts generally apply a strict interpretation of the compensation clauses, so that they extend only to obligations that have reasonably arisen. However, any party that compensates should consider including the requirement that the party receiving the award should take appropriate steps to mitigate its loss following a breach of contract. First, you should consider providing an explicit mitigation obligation. This could be done by a clause in the agreement that would apply, on a reciprocal basis, to all compensation for the agreement in question. For example, “each party makes reasonable efforts to reduce the losses it incurred under this agreement, including potential losses resulting from any compensation under this agreement.” Or perhaps could only be intended for specific compensation: “The compensated party is not entitled to compensation under clause [x], as long as it does not take appropriate measures to reduce its losses. Take mitigation. I`ve always thought of leniency as a reflection of causality. If someone fails to mitigate, if it were helpful to mitigate, could it be said that the resulting loss is not due to the injury, but to the failure to mitigate? Therefore, if there is an obligation to compensate for losses caused by an offence, does this text not remain the notion of reduction (or, at the very least, of its causal equivalents)? “The contractor hereby undertakes to provide the operator with … any claim resulting from injury, death, illness or illness that arises or arises from the holder and staff as a result of or in the course of the performance or non-compliance of the contract… Compensation is an essential part of any contract lawyer`s range of instruments and often a hotly contested aspect of contract negotiation. The compensation act is complex and, in many cases, is still far from regulated. Understanding the principles and knowing where the potential pitfalls are can help you identify contractual risks and, if possible, mitigate them from the start.