A demand letter is a formal notice to resolve a dispute used by individuals or entities regarding payment owed by one party to another. A demand letter is addressed to perform an alleged legal obligation. Most of the demand letters include a deadline for action. These demand letters are an exertion by one party engaged with the question to reach a resolution to making formal legal action through the courts. It is important to see how a demand letter works, why one may need to be sent a demand letter, and what you can expect subsequent to sending a demand letter.
You can send a demand letter for any of the following reasons:
- Brain Injury
- Business Litigation
- Car Accident
- Employment Law
- Firm News
- In The News
- Motorcycle Accident
- Pedestrian Accident
- Personal Injury
- Premises Liability
- Trade Secrets
- Truck Accidents
- Wrongful Death, and more
- Breach of contract
- Money owed by an individual / company
- Product/Service Refund issues
- Insurance claims
- Landlord won't return the deposit
Need to Send Demand Letter
Demand letters are courtesy to maintain some goodwill between business parties and they often prompt payment, avoiding expensive litigation. There are various reasons why a person thinks of sending a demand letter. Usually a person will send a demand letter after a failed attempt to get restitution or payment for an obligation or commitment done by the other party.
Some of the most common reasons for sending a demand letter are:
- Someone owes you money
It may be due to a mutually agreed upon contract.
- Someone owes you an obligation in some way
It could be the case of an agreement completing a job or task for the other party, but failed to follow through on their obligations. Here in this case, a demand letter is sent to force the party to complete the job.
- For insurance claims after an injury
During the settlement negotiation process, a demand letter is often sent by the injured party to the insurance carrier of the accused party. The demand letter is sent to claim the total damages incurred by the victim and compensation.
How to Write a Formal Demand Letter
Nobody wants to go to court if the issue can be resolved without any legal action. Sending a demand letter is the first step to settle the dispute by negotiating the process. The demand letter explains the whole matter, the amount you are claiming incurred in bulls, and the total amount in the settlement you are requesting. The demand letter is a kind of open invitation to settle the dispute with the opponent. Once you send your demand letter, if the possibilities of the settlement fail, a small claim court is the next step and possible solution to settle the dispute.
Demand Letter Benefits
A demand letter often contains the "threat" that if it is not adhered to, the next communication between the parties will be through a court of law in the form of formal legal action (i.e. pleadings). Most of the courts require you to make a formal demand letter for your payment before filling your lawsuit in the court. Although it is almost always a good initiative to send a demand letter before instituting legal proceedings, demand letters are not generally prerequisites for a legal action but there are exceptions such as legal action on promissory notes or if the contract requires it. Your demand letter will catalyze the settlement with the opponents. Moreover, explaining your matter in the demand letter will make it easier for you to organize the matter in an ideal way. A demand letter urges and boosts case settlement.
Demand Letter: Urges Case Settlement
One advantage of an unmistakable, demand letter demanding the disputed amount is that you probably won't experience to have the difficulty of recording a small claim case. Regardless of whether you have fruitlessly contended with your opponent face to face or via telephone, spreading out the reasons, you're owed money in a demand letter shows some action. With a demand letter, you and your dispute get a concrete face that cannot be neglected anymore. The other party will have to face the fact that you won't just disappear. Furthermore, on the off chance that you sue, it will require significant investment and energy to defend a case. Even worse, you may win. So, the chances of you getting paid will increase when you put forth your defense recorded in a writing form.
Demand Letter: Helpful in Organizing the Case
Demand letters are powerful tools in a lawyer's arsenal. In small claim court, you have to prove your case with evidence. When you write your demand letter, you will set fourth your position. You build grounds to prevail. You are better prepared for your case with facts, law and evidence. A demand letter will help you to think through every aspect of your case. It is good practice to demand an apology and a retraction before taking legal action.
Preparing Your Demand Letter
While writing a demand letter, keep your goal in mind. One way to avoid a costly and time-consuming lawsuit is to present a demand letter to the other party, as a way to start a discussion.
Summarize at the Beginning
In a sentence or two, tell the main point you want to make about the damage done, then give your demand for payment or other damages.
While writing a demand letter, write your version of the facts so that if you end up in court, you have a document that sets forth the nature of the dispute. The facts should include your attempts to resolve the dispute. Refer to email, conversations, or other communications that demonstrate that legal action is the last resort.
Refer to Evidence
If you have evidence (like a contract), you don't need to include it, but you should refer to it in the demand letter. You need not attach the actual contract in your demand letter, but save it in case you need to use it as evidence in court later on.
Make a Demand
Be specific to what you want. If there's an issue of fact about whether your opponent is actually at fault for the incident, explain why you believe the recipient owes you this money.
Set a Deadline and Establish Method of Payment
In your demand letter state a reasonable deadline based on the amount of money owed. If the amount is higher, you even offer the possibility of payment installments.
Offer a Consequence
Through your demand letter, let the recipient know that if your demands aren't met, what you are planning to do (i.e., file a lawsuit).
Be direct and calm, leaving your personal feelings out of the descriptions. Don't use abusive language or call the other party names. Being clear, direct and professional will help your case.
Be Complete and Detailed
Include details of dates, numbers, amounts of money. Include in the letter:
- Your full nam0e and address
- The description of the unfair or deceptive act or practice, with dates and details, including any law you believe has been broken
- The injury you suffered, in measurable terms, including loss of money, damage to something you own, or being the victim of an unfair practice
- Your demand for relief, including the money you want
- When and how the other party must respond
When you are stating your demands, make them as reasonable as you can. Types of damages include
- Compensatory Damages
- Punitive Damages
Be Honest and Truthful
Be honest and mention the actual facts. Avoid any wrong allegations and charges that you cannot prove later on.
Make and Keep Copies
Make a copy of each letter before you send it, and keep a copy of the post office and receipts. Keep all correspondence from your advisory. If you are going to send a demand letter via email, be sure not to delete it and keep copies of all replies.
Use Certified Mail
Send a demand letter via certified mail with a return receipt requested. You can use the return receipt in the small claim court as a proof that your opponent did not receive the demand letter.
Outcomes of the Demand Letter
Once the demand letter is sent, various outcomes could occur. This could include:
- The demand is met
- A counter offer is made
- The demand is refused
When to Consult an Attorney
If you fail to reach resolution after sending a demand letter, you could file in small claims court or consult a personal injury attorney. In small claim court, you can appear yourself without an attorney. Approaching a small claim court will bound the defendant to appear in the small clam court. If the opponent does not appear in a small claim court, a default judgment will be rendered in your favour.
If you are unsure about what to include in a demand letter, how to phrase it, or whether you are making an accurate and compelling argument, consider talking to an attorney. A demand letter from a law firm versus one that is sent from an individual carries much more weight. An attorney will have the legal experience necessary to properly craft the demand letter and ensure that all points are mentioned.