The Rule of Mitigation of Damages Requires That a Party

question 6

Multiple Choice

The rule of mitigation of damages requires that a party injured by a breach of contract must:

• A) take any and all steps possible to reduce the damages that will be sustained because of the breach.
• B) discharge the contract before filing suit for breach.
• C) hire someone else to perform the contract.
• D) take reasonable steps to reduce the damages that would otherwise be sustained because of the breach.

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Definitions:

Net Operating Income

The profit generated from a company's everyday business operations, calculated by subtracting total operating expenses from total revenue.

Turnover

Refers to the rate at which inventory is sold and replaced or the volume of business conducted within a specific period, often used in analyzing business efficiency.

Return On Investment

A measure of financial performance calculated as the net profit divided by the total investment.

Average Operating Assets

The average value of the assets used in the day-to-day operations of a business over a specific period.