What duty does the non-breaching party of a contract have by law?

The non-breaching party in a contract has an obligation by law to reduce losses resulting from the breach. This legal principle is grounded in the duty to mitigate damages. When a party encounters a breach of contract, they are not permitted to passively allow their losses to accumulate; instead, they are required to take reasonable steps to lessen those losses.

For instance, if a tenant is wrongfully evicted, they must seek new housing rather than remain homeless and accrue further costs from the breaching party's actions. This duty to mitigate is essential because it encourages parties to act responsibly and reduces the overall burden on the legal system by minimizing damages whenever possible.

The other options do not reflect this legal obligation. Seeking damages might occur after the duty to mitigate is fulfilled, but it isn't a legal requirement by itself. Terminating the contract may be an option but is not mandated by law as a duty. Similarly, maintaining the contract terms isn't typically feasible or sensible when a breach has occurred. Instead, the focus is on taking proactive measures to limit the financial impact of that breach.