OPINION

In this action to recover damages for violations of section 5 of the Securities Act of 1933 and section 10(b) and rule 10b — 5 of the Securities Exchange Act of 1934, plaintiffs Foster and Kemp appeal from a summary judgment for defendants. The only issue before us is whether, taking plaintiffs’ allegations as true, defendants’ violations of the securities laws entitle plaintiffs to any monetary relief.

In 1970, plaintiffs each paid $10,000 to American Information Exchange, Inc. (AIE), a wholly owned subsidiary of defendant Financial Technology, Inc. (FTI), for the privilege of becoming AIE franchisees. AIE, it is alleged, failed to perform its obligations under the franchise agreement, and plaintiffs sought return of the $10,000. In settlement of these claims FTI agreed to sell to each plaintiff 6,667 shares of common stock of Basic Resources, Inc. (BRI), another defendant, which was to be issued to FTI in exchange for some oil properties. The agreement provided that the shares be delivered to plaintiffs on or before April 30, 1971, and that upon acceptance of the shares plaintiffs were to execute releases of any claims they possessed against FTI, AIE, and their officers and directors, arising out of the franchise agreement. Also, plaintiffs agreed to *1071 forbear taking any action on the claims prior to April 30, 1971. The BRI shares were never delivered, and no releases were executed.

In January 1972, plaintiffs commenced this action against FTI, BRI, and Clifford A. McLin and John Dillard, officers of FTI and BRI. Liability was predicated on the failure to register the sale of the BRI shares and certain statements made in connection with the sale by McLin and Dillard, which misrepresented their position within FTI, the probability that the deal between FTI and BRI would ever be consummated, and BRI’s financial position. They seek damages in the amount of the claims they were to release — $10,000. Because of FTI’s present financial condition it appears that plaintiffs look principally to the assets of the individual defendants for recovery.

While this action was pending, FTI entered proceedings under Chapter XI of the Bankruptcy Act. In these proceedings plaintiffs each submitted verified claims for $10,000. A plan of arrangement was confirmed in which plaintiffs were each to receive 20,000 shares of FTI common stock in settlement of their claims. From the stock quotations contained in the record, it appears that after the settlement the 20,000 shares could have been sold for $1,000.

In the present action, summary judgment was granted for defendants on the ground that, regardless of whether there were violations of the securities laws in connection with the sale of the BRI shares to plaintiffs, plaintiffs are entitled to no damages.

In their pretrial statement the parties stipulated that the sale of the BRI shares to plaintiffs was subject to the registration requirements of section 5 of the Securities Act. Plaintiffs’ only remedy for a violation of these requirements is spelled out by section 12(1) of the Act: recovery of any consideration paid. Defendants’ argument, accepted by the district court, is that because plaintiffs failed to execute the releases, there is no consideration for them to recover. We disagree. The settlement agreement, as we construe it, was a bilateral contract; FTI’s promise to deliver the shares was given in exchange for two distinct promises by plaintiffs: (1) an unconditional promise to forbear bringing any action on the franchise agreement between the date of the contract, February 15, 1971, and April 30, 1971; and (2) a promise, performance of which was conditioned upon acceptance of the shares, to execute formal releases. Plaintiffs’ performance of the first promise gave FTI one of the benefits it had bargained for — a 75-day period during which its officers could attempt to close the deal with BRI and resolve FTI’s financial difficulties, without threat of suit. We view this 75-day forbearance as consideration rendered, the reasonable value of which is recoverable under section 12(1).

If plaintiffs can prevail on their 10b-5 claims, they may be able to obtain further relief. In general, rule 10b — 5 permits defrauded buyers to recover the difference between the value of the consideration they gave and the value of the security they received. See Levine v. Seilon, Inc., 439 F.2d 328, 334 (2d Cir. 1971). For plaintiffs, damages measured under this formula will be equal to their recovery under section 12(1). But in addition to these out-of-pocket damages, federal courts have increasingly recognized the buyer’s right to consequential damages where it can be proven with reasonable certainty that such damages were caused by the defendants’ 10b-5 violation. Zeller v. Bogue Elec. Mfg. Co., 476 F.2d 795, 802-03 (2d Cir.), cert. denied, 414 U.S. 908 , 94 S.Ct. 217 , 38 L.Ed.2d 146 (1973); Madigan, Inc. v. Goodman, 498 F.2d 233, 238-40 (7th Cir. 1974); accord, Restatement (Second) of Torts § 549(l)(b) (Tent. Draft No. 11, 1965).

Reviewing the allegations in plaintiffs’ complaint, it is possible they might be able to prove that theirs is an appropriate case for consequential damages. At the time plaintiffs entered into the settlement agreement they each pos *1072 sessed a claim against AIE for $10,000. Assuming that they could have realized more than they ultimately did on these claims had they sued upon them at that time, when FTI was apparently in sounder financial health, defendants’ conduct in inducing them to forego this opportunity, if proven, caused them to suffer a real loss, which should be compensable under rule 10b-5. These opportunity-lost damages are the same in kind as those incurred in Zeller , where because of the 10b-5 violation, a corporation lost the extra profits it would have earned had it reinvested its excess funds in its own operation instead of using them to purchase securities from the defendant. 476 F.2d at 803 .

We hasten to add that in proving these consequential damages, plaintiffs’ burden on the issue of causation is not a light one. They must prove first, that defendants’ misrepresentations violated rule 10b — 5; second, that but for these misrepresentations plaintiffs would have brought suit on their claim against AIE at the earlier date; and third, that any losses plaintiffs incurred were a reasonably foreseeable consequence of these misrepresentations.

Further, plaintiffs’ damages do not necessarily include the full difference between what they could have realized on their claim had they asserted it instead of entering into the settlement and what they ultimately realized in the Chapter XI proceeding. As in all 10b — 5 cases, their damages are limited by what they would have realized if they had acted upon their claim when they first learned of the fraud or had reason to know of it. Esplin v. Hirschi, 402 F.2d 94 , 104r-05 (10th Cir. 1968), cert. denied, 394 U.S. 928 , 89 S.Ct. 1194 , 22 L.Ed.2d 459 (1969). Moreover, in this case there may be an additional limitation as a result of the apparent breach of FTI's promise to deliver the shares on or before April 30, 1971. Under the familiar mitigation of damages principle, a party cannot recover that part of his loss caused by his own failure, once he has reason to know of the breach, to take reasonable steps to avoid further harm. Although plaintiffs are not here asserting a breach of contract claim, the notion of what constitutes reasonable conduct by the nonbreaching party carries over to the determination of the amount of plaintiffs’ loss for which defendants should be held responsible. Consequently, at the point where a reasonable man — either because of the breach or discovery of the fraud — would have taken action to protect himself from further depreciation in the value of the claim, the chain of causation is cut and plaintiffs cannot recover damages for subsequent losses.

There should also be subtracted from plaintiffs’ damages any portion of the amount they may recover under section 12(1) for their 75-day forbearance that represents compensation for their assumption of the risk that the amount they could realize on their claims would diminish over that period. Otherwise, plaintiffs would be receiving a double recovery.

One additional point requires comment. Defendants argue that because plaintiffs failed to execute the releases and subsequently submitted their claims in the Chapter XI proceedings, they are precluded from recovering damages, presumably under some notion of election of remedies. ' This mistakenly assumes that the remedies of rescission and consequential damages for losses suffered prior to that rescission are inconsistent. See Restatement (Second) of Torts § 549(l)(b), Comment e (Tent. Draft No. 11, 1965). As the above analysis indicates, we believe that plaintiffs’ prosecution of their claims against FTI, rather than operating as an election against seeking damages, was the reasonable conduct required of them to protect themselves from further loss. Under the rule advanced by defendants, plaintiffs, upon learning of the fraud, would face the dilemma of seeking rescission and thereby waiving their right to recover consequential damages, or not seeking rescission, which might subject them to further losses for which they could receive no compensation.

*1073 Because we conclude that plaintiffs’ allegations may entitle them to some monetary relief, the summary judgment is reversed and the case is remanded to the district court for consideration of all issues presented by plaintiffs’ claims. As pointed out in Judge Thompson’s concurring opinion, some of the arguments considered in this opinion were not fully developed in the district court. The case here is different from that where a party seeks to assert for the first time on appeal a claim, defense, or objection. Plaintiffs’ point from the outset has been that they were wrongfully induced to release or promise to release their claims against AIE. The only question we consider here is the proper measure of their relief. In these circumstances the guidelines for appellate review should not be so rigidly construed. Further, this court has held that where justice so requires, a case may be remanded to the district court to decide issues not argued before it originally. E. g., Nuelsen v. Sorensen, 293 F.2d 454, 462 (9th Cir. 1961). The facts of this case are unique and the issues complicated. Plaintiffs’ allegations indicate they are' o^t $10,000 and have little to .show for it. Since a remand is required in any event, we believe it proper for the district court to consider whether plaintiffs are entitled to the relief discussed herein.

Reversed.