If there is breach of contract by party to the contract then issue legal notice to party 

1)  Mitigation in law is the principle that a party who has suffered loss (from a tort or breach of contract) has to take reasonable action to minimize the amount of the loss suffered.

2) When a person suffers damages as a result of a breach of contract, he or she has the legal obligation to minimize the effects and lossesresulting from the injury. The duty to mitigateworks to deny recovery of any part of damagesthat could have been reasonably avoided.

You may take the example of case Highway Engineering Private Limited versus Union of India and others

In M. Lachia Setty & Sons Ltd. vs. Coffee Board, Bangalore9, the Supreme Court held that the principle of mitigation of loss does not give any right to the party who is in breach of the contract but it is a concept that has to be borne in mind by the Court while awarding damages.

Mitigation of loss is a responsibility comes upon the affected party who suffered the loss, to do everything possible to mitigate the loss before claiming loss or damages from the defaulting party for any breach of contract.

It is a concept of English law principles.

Indian contract law does not have any such specific provision to this effect. Indian court does not go through this principle except in rare cases where a common man with ordinary prudence is normally expected to act in such direction to mitigate his losses.

No. Your agent's arguments is totally unjustified with reference to Indian contract law provisions and laid down principles thereto. 

Your agent is liable to compensate you for the balance amount of damages after the mitigation in losses if any. 

I explained you the law regarding mitigation of loss and it's acceptance and application by Indian court in contract  disputes. 

Mitigation is  not ratification of breach of contract 

2)his argument is not legally tenable 

1. The version of your agent is legally tenable .

2. Once you conform to the acts of the agent and compensate him as well in furtherance of his acts then you tend to ratify his actions leading to mitigation of loss and hence the breach of contract can no more be resorted to.

The argument is not tenable. You need to prove in the court that you have taken all steps in good faith to mitigate the damages 

if there was a breach of contract by your agent then the appropriate thing for you to do was to revoke and cancel his agency!

IF CERTAIN ACTS DONE BY THE AGENT, WHICH HE WAS NOT SUPPOSED TO DO AS PER THE AGENCY TERMS, ARE NOT OBJECTED TO BY THE PRINCIPAL AND HE TAKES NO STEPS AGAINST SUCH ACTS DESPITE HAVING KNOWLEDGE ABOUT THE SAME, THEN IT WILL BE CONSTRUED THAT THE PRINCIPAL RATIFIED THE ACTS OF THE AGENT, WHICH WERE CONTRARY TO AGENCY TERMS, IMPLIEDLY!

the principal, on whose behalf, though without whose authority, the agent has acted, accepts the agent's act, and adopts it, just as if there had been a prior authorisation by the principal to do exactly what the agent has done. The interesting point, which has given rise to considerable difficulty and dispute, is that ratification by the principal does not merely give validity to the agent's unauthorised act as from the date of the ratification: it is antedated so as to take effect from the time of the agent's act. Hence the agent is treated as having been authorised from the outset to act as he did. Ratification is 'equivalent to an antecedent authority' ."

Poor argument, you are entitle to recover cost incurred to mitigate those damages and compensation. For any damages caused by agent, principal is liable but principal entitle to recover the same from agent.

No concept of deemed consent where act is illegal even if in knowledge of principal. On the contrary it is admission by agent that, he committed such thing.

Yes I agree with you. The principal should have no knowledge or if he had knowledge he had acted in good faith

Dear mitigation of loss the process by which the affected party due to breach of contract take every possible step to minimize the losses suffered due to breach. 

But even after mitigation the complete loss have not recovered then affected party can take legal course to recover the loss and compensation from breaching party. 

The arguments of your agent to deny compensation for losses suffered even after mitigation is totally illegal.

Mitigation in law is the principle that a party who has suffered loss (from a tort or breach of contract) has to take reasonable action to minimize the amount of the loss suffered.

The plaintiff must take all reasonable steps to mitigate the loss which he has sustained consequent upon the defendant's wrong, and, if he fails to do so, he cannot claim damages for any such loss which he ought reasonably to have avoided."

In cases of breach of contract the plaintiff is under no obligation to do anything other than in the ordinary course of business, and where he has been placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the defendant whose breach of contract has occasioned the difficulty. The plaintiff is under no obligation to destroy his own property, or to injure himself or his commercial reputation, to reduce the damages payable by the defendant. Furthermore, the plaintiff need not take steps which would injure innocent persons."

As far as possible a party who has proved a breach of the contract, is to be placed, as far as money can do it, in as good a situation as if the contract had been performed.A statutory duty is cast on the plaintiff who has proved the breach of the contract of taking all reasonable steps to mitigate the loss consequent on the breach of the contract.If the plaintiff, who proves the breach of the contract but fails to prove that he took all reasonable steps to mitigate the loss consequent to the breach of the contract, he will be debarred from claiming damages to the extent he could have mitigated the same by taking such steps.

In M/s. Murlidhar Chiranjilal vs. M/s. Harishchandra Dwarkadas & Anr7, the Supreme Court examined the scope of Section 73 of the Indian Contract Act and observed, "The two principles on which damages in such cases are calculated are well settled. The first is that, as far as possible, he who has proved a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed; but this principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach and debars him from claiming any part of the damage which is due to his neglect to take such steps".

In the case of Pannalal Jugatmal vs. State of Madhya Pradesh8, the Court observed, "Mitigation of Damage is incorporated in the explanation to Section 73 of the Contract Act. The explanation casts a burden upon the person complaining of breach of the contract to show that he did not possess means of remedying the inconvenience caused by the non-performance of the contract. The law, for wise reasons, imposes upon a party subjected to injury from breach of a contract, the active duty of making reasonable exertions to render the injury as light as possible".

In M. Lachia Setty & Sons Ltd. vs. Coffee Board, Bangalore9, the Supreme Court held that the principle of mitigation of loss does not give any right to the party who is in breach of the contract but it is a concept that has to be borne in mind by the Court while awarding damages.

Application of Mitigation of Damage in Arbitration Law

In the case of Pepsico India Holding Pvt. Ltd. vs. Nishiland Park Limited, the Court observed, "The law of mitigation under Section 34 of the Arbitration Act, cannot be overlooked by the Court, when such award is challenged on the merit itself. The loss of profit claims always have a foundation of net loss and not only the estimated gross profit, without supporting accounts and material. The doctrine of mitigation was overlooked though the claim itself was denied by the Petitioner. In my view, it amounts to wrong estimation of the damages, as undue importance is given to the unsupported expert's opinion. The actual loss and the proof of the same, is totally missing. It is not the case of possible view or interpretation of the contract. Any assessment of damages on undisclosed or unknown formula or principle, 'falls within the ambit of error of law' and is contrary to the contract and the law, therefore, unsustainable.

The alleged non- supply of labels itself cannot be the reason to grant the damages or compensation without proof of actual loss or supporting material to loss of profit, especially when no steps whatsoever taken and produced on record to show the steps to mitigate the losses were taken".

Conclusion

Mitigation of damage doesn't give any right to the party in breach of contract, but it is applied by Courts while awarding damages. Also, reasonable steps to mitigate the loss should be taken by plaintiff otherwise he cannot claim the amount of loss which he could mitigate.