What is the innocent party’s obligation to mitigate damages after a breach of contract?

The correct answer emphasizes the innocent party's responsibility to take reasonable steps to reduce their damages after a breach of contract. This principle is known as the duty to mitigate damages. It obligates the non-breaching party to act in good faith and take reasonable measures to minimize the losses caused by the breach.

This might involve seeking alternative contracts or employment opportunities, for example, rather than allowing losses to accumulate without making an effort to reduce them. The law does not require the innocent party to take extreme or burdensome actions to mitigate their damages, but they must not be passive in the face of losses. The emphasis on "without significant inconvenience" highlights that while there is a duty to mitigate, it should not impose unreasonable or excessive burdens on the innocent party.

In situations involving anticipatory repudiation, while the party may not have a duty to mitigate in the same way as after an actual breach occurs, they are still encouraged to mitigate as much as possible. Overall, the principle of mitigation aims to ensure fairness and prevent unnecessary losses in the contractual relationship.