“The Kiss Hello” – Duty to Mitigate

After George fails to cancel his appointment with Wendy the Physical Therapist with 24 hours notice, Wendy still charges him even though George was unable to make it to the appointment. Is Wendy’s policy legal? Can George actually be charged for a cancelled appointment just because he didn’t cancel with enough notice?

Normally, when one party to a contract is unable to fulfill their obligations, a court can impose one or more of various remedies, but most commonly expectation damages, in order to put the aggrieved party in the position that they would have been in had the contract been fulfilled. This is what Wendy is arguing for. By making an appointment with her office, George entered into a contract with her in which she would provide physical therapy services for him, and he, in exchange, would provide payment. By not showing up to that appointment, George has failed to perform his obligations under the contract, and, as such, must compensate Wendy accordingly.

Oh, you have a policy. The delicate genius has a policy.

However, damages are not simply calculated by what the failing party agreed to pay, and damages can be limited by the aggrieved party’s duty to mitigate. What this means is that if the damages from the broken contract can be mitigated by the aggrieved party finding a way to lessen their financial loss, within reason of course, then the failing party is not obligated to to pay damages even though they broke the contract. In this instance, the duty to mitigate obligates that if another client called Wendy’s office after George made his cancellation, and wanted an appointment for George’s cancelled spot, then George would be under no obligation to pay for Wendy because Wendy has suffered no loss. The money she would have made from George’s appointment could have instead been made by someone else’s appointment. The laws of contracts prohibit Wendy from “doubling up,” collecting damages from George while simultaneously having another client take George’s cancelled place.

However, there is no evidence to suggest that Wendy had the opportunity to find a new client for that time slot and turned it down. As such, given the day of cancellation by George, it would not be unreasonable for a court to determine that Wendy had fulfilled her duty to mitigate under these circumstances.

- People think they're so important. - I'm going on record right now.

One open question that remains is whether Wendy owes George anything for when she cancels on George later in the episode. George could argue for some kind of expectation damage, though it may be difficult to calculate what his actual loss was. George certainly is not entitled to $75 cash just because Wendy cancelled on him, as that would unduly enrich him. But if he had paid in advance for the appointment, he may be able to recoup that payment. Most fairly though, it would seem, that George is entitled to some kind of credit at Wendy’s office because of the broken contract/appointment. George is of course under a duty to mitigate as well, but because of the late cancellation, and the fact that he was entirely unaware of the cancellation until he arrived at Wendy’s office, he had no opportunity to mitigate and thereby fulfilled his legal obligation.

When factoring in damages, a court may also lessen the amount based upon any costs saved as a result of the breach. Therefore, it is likely that George would not have to pay the full $75, just a portion of it, as Wendy likely saved money on equipment by not having George make his appointment. While Wendy’s 24 hour policy itself may not legally automatically result in George having to pay for a cancelled appointment, it is certainly not unreasonable to believe that on such short notice, Wendy would be unable to find another client for that time slot and could not have mitigated her losses.

When huge sums of money are involved, the genius can be disturbed.

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