Issue: Whether Fran is under a duty to migrate the loss.
Rule: According explanation to Section 74 of the Contract Act 1950, Mitigation of loss is the party seeking damages is under a duty to mitigate the loss. The law imposes a duty to the injured party to take all reasonable procedure to minimize their loss instead doing nothing.
Application: Based on the case of Kabatasan Timber Extraction Co v Chong Fah Shing, the breach of this case occurred when the defendant had failed to deliver the timber. The respondent to have gone to the expense and trouble of buying logs from elsewhere. However, it was said the logs were lying at a distance of approximately 500 feet from sawmill. The Federal Court held that was a failure of the respondent part to mitigate his losses because the appropriate damages to be awarded in this case should be the approximate cost of hauling the lodge to the sawmill not the cost of buying lodge from elsewhere.
Conclusion: Although Fran was the party who suffer from the losses, she still under responsible to the duty to mitigate her losses after the breach of contract