Agency
What is 'mitigation of damages' and why should a Hawaii seller consider it after a buyer defaults?
AA. The seller's right to collect all future profits lost due to the buyer's default
BB. The legal requirement to take reasonable steps to minimize losses after a breach; a seller who refuses reasonable efforts to re-sell the property may not recover excess damages from the defaulting buyer✓ Correct
CC. The buyer's obligation to reduce the seller's property taxes after default
DD. A court requirement for sellers to lower their asking price after a failed sale
Explanation
After a buyer's breach, the seller has a duty to mitigate—to take reasonable steps to minimize their losses. If the seller can re-sell the property at the same price or at an acceptable loss, they may only recover the difference plus direct costs from the defaulting buyer. Refusing to relist or re-market the property could prevent the seller from recovering additional damages.
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