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Review Your SQE 1 Practice Records

Examination Timing: 00H00M01S

A company purchases drums of industrial cleaning acid from Ms. Johnson and stores them in its factory. The drums are not suitable for storing the acid, leading to a leak that damages the factory floor. An employee of the company notices the damage caused by the leak but fails to move the drums, which could have been done at no cost. The company claims £5,000 for the cost of repairing the floor. Ms. Johnson refuses to pay this amount, arguing that the damages payable should be lower. Will Ms. Johnson succeed in her argument?

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The principle of mitigation of damages requires that a party suffering loss must take reasonable steps to minimise that loss. In this case, the company had a duty to mitigate its losses by moving the leaking drums, especially since it could have been done at no cost. By failing to do so, the company did not fulfil its duty to mitigate, and thus cannot claim the full £5,000 for the repairs. The court is likely to reduce the damages payable because the company failed to act reasonably to prevent further damage. 

Key Point: The duty to mitigate damages is a crucial principle in tort law. It obliges the injured party to take reasonable steps to reduce their losses. Failure to mitigate can lead to a reduction in the damages recoverable from the party at fault.

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