What is the ratio in Payzu v Saunders?

An innocent party may be required to accept reasonable alternative performance offered by the contract-breaker as part of their duty to mitigate loss, and unreasonable refusal may reduce damages.

What did the court decide in Payzu v Saunders?

The Court of Appeal held that the buyer should have accepted the seller's reasonable offer to deliver goods for cash rather than credit, and their refusal reduced their damages claim.

Why is Payzu v Saunders important for contract law?

It established that the duty to mitigate may require accepting reasonable alternative arrangements from the contract-breaker, promoting commercial pragmatism over rigid contractual rights.

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