Comment: The “Collateral
Source” Rule
In
torts, we don’t mitigate damages based on compensation received from
unemployment funds, insurance, and the like.
We also apply this to contracts…sometimes.
The
rule that trumps the collateral source rule is the Golden Rule of Contracts: the
plaintiff shall be put in the position that performance would have put him in,
and no better.
For
this reason, in United Protective Wkrs. v. Ford, the worker’s damages
are mitigated by the retirement payments he received after his dismissal. Other courts reject this rule.
Problem
We
talked about this in class. The key fact
is that the school district didn’t really want a better quality teacher or one
with more experience, they were simply bound by the collective bargaining
agreement to pay the new person more.
Therefore, it turns out that the original therapist who breached is indeed
liable to the district for $3,000.
Back to Limitations on Expectation
Damages