What must parties do regarding their losses according to contractual obligations?

Parties in a contract have a responsibility to mitigate their losses, which means they must take reasonable steps to lessen the impact of any loss they may suffer due to a breach of contract or other related issues. This principle is fundamental in contract law; if a party incurs losses as a result of another party's failure to fulfill their contractual obligations, they can't simply claim the total amount of their losses without demonstrating that they took appropriate actions to reduce those losses. This helps to ensure that the injured party doesn't benefit from their loss and encourages efficiency in resolving disputes.

In the context of the other choices, maximizing potential losses would be contrary to the obligation to mitigate, as it would involve allowing losses to increase. Ignoring losses incurred during negotiations is not viable because parties need to account for all relevant losses when considering their claims. Lastly, transferring losses to another party might be feasible in some cases through insurance or other means, but it does not relieve the original party of their duty to mitigate losses directly. Therefore, mitigating losses is the clear and correct obligation that parties must adhere to in a contractual relationship.