A demand letter is a formal notification. It tells a service provider, merchant, insurance company, or business that an aggrieved party intends to pursue legal action and take them to court over an alleged unfair treatment or erroneous trade practice.
This letter can be written as a precursor to filing a lawsuit. It can also act as an effective document to help you resolve legal issues without undergoing litigation. Everyone knows the latter is costly, long, drawn-out, and stressful.
In many instances, companies use demand letters exactly as their name suggests. They demand that customers, partners, or suppliers pay their arrears or money due to them for services rendered. Although these letters may seem pretty straightforward because you are only demanding something, this is still considered a legal document.
For this reason, you cannot afford to make a mistake when drafting one. Technically, you do not need a lawyer to draft a demand letter. But having a reputable attorney write the letter on your behalf or review your first draft provides you with a stronger foundation.
As a result, the recipient is least likely to ignore your claims, and seeing the name of a law firm indicates you are serious. Besides, your adversary can use your document against you in court, so it is best to write a demand letter with the guidance of an experienced professional. Learn more about demand letters below.
When to Write a Demand Letter
If you happen to disagree with an individual or organization, you typically try informal efforts to resolve the dispute. However, if that doesn’t work, sending a demand letter is the next step to persuade the other party to give you what you want. For example, you can send someone a demand letter if you believe that they:
- Failed to repay money you lent to them
- Damaged your property
- Caused physical injuries
- Neglected to pay for the services you rendered
When people cause harm to you, whether physically or financially, most people assume that you will not deal with hassle of court to pursue them for the injury they caused or money owed. A demand letter can send a strong message that you are taking the matter seriously and that you may pursue further action if they file to respond adequately. It is important though that when send a strong demand letter you state the following:
- The reasons why the party is liable for your losses
- Evidence (like receipts) to back up your claims
- Stating that you intend to file a lawsuit if they do not respond adequately
Once the at-fault party receives your demand later, they must evaluate whether or not you will back down or pursue your day in court. As a result, you get them thinking that they will need to spend the time, effort, energy, and money to defend their position against your assertions.
As such, a demand letter provides notice to the individual or organization about the nature of your claim. It can also encourages them to negotiate a fair settlement rather than go to court. As a result, the victim can recover damages more swiftly and finally move on.
How to Write a Demand Letter
If you intend to draft your first demand letter, the key to clear and succinct writing is to keep your objective in mind. Your letter must encourage your opponent to assess the entire situation in a professional and business-like manner. Get straight to the point because beating around the bush will only delay your results.
You want your demand letter to address the issues in contention and try to persuade the potential defendant to you point of view on liability and damages. These points, and how persuasive they are, will determine whether the at-fault party will be encouraged to settle. The letter can trigger the following types of questions to churn in the recipient’s mind:
- Do I want this dispute to escalate and be resolved in public courts?
- How much time will I have to allot to defend myself?
- Based on the facts at hand, is it highly likely for me to lose?
- How much will I need to pay in damages and attorney’s fees if the verdict is against me?
- Is it better to settle this dispute immediately for a fair amount?
Of course, you will not write out these questions. However, the way you draft your demand letter will make your opponent think about these issues. For this reason, you need to draft your letter well. Here are some helpful pointers you must take note of as you write:
1. Type the Letter
This is a formal letter, so you must type it out. Do not send a handwritten one. If you do not have access to a computer, most public libraries offer them free to use. You can also borrow from a friend to get things started.
2. Note Down Facts
Your demand letter must identify the parties involved. Then, you must review the history of the dispute and outline the details that transpired. It may seem odd to do because your recipient knows what happened.
Remember that people tend to only recall details that support their side or what is convenient for them. Writing out a reasonable description of the unfair practice is essential. Stick to a factual account of the problem and how it escalated.
Outlining a clear description of the events will give the decisionmakers on the other side a clearer picture of what happened. The demand letter is an efficient way to make a record of the initial dispute along with other subsequent details such as:
- Phone conversations
- Text messages
- Unanswered calls
- Other inappropriate conduct by the defendant
- Police reports
- Medical records
- Medical bills
3. Keep a Polite and Professional Tone
As the saying goes, you attract more flies with honey than vinegar. Although you are already upset and feel that you have been wronged, be careful to not personally attack your opponent. The more you disparage the person, the less likely you will be able to resolve the matter professionally.
Engaging in a personal attack invites your adversary to reply rudely and angrily or not at all. Instead, you want your adversary to conduct rational analysis while reading your letter so that they will realize that it makes more sense to reach a fair settlement.
By staying calm and keeping a professional tone in your letter, you will demonstrate that you are confident in your assertions, and this will signal to the other side that you are ready to go to court with the arguments and evidence in your demand letter.
4. Ask for Specific Demands
Identify the damages you have suffered. For example, describe your monetary loss, the injuries you suffered, the damage to your property, and how much it will cost to fix it. Explain why your damages was your opponent’s fault. Then, state what you want as compensation for these damages.
To illustrate, someone may owe you $1,500, and the person has not paid in over a year. You can ask for $2,000 with the extra payment for the length it took and your loss of the use of the money had it been paid over a year ago.
To help you out, you can also include receipts and other data of the financial losses you have suffered. You can include photocopies of the following:
- Cost of medical visits
- Lost income due to absences
- Photos of property damage done by your adversary
- Invoices on repair costs
5. Set a Deadline
It is vital to indicate a deadline for your demands. The more complicated your matter, the more time it will take to properly evaluate it by your opponent. Typically, you will want to give the other side 30 days to look at all of your points and evidence. Anything longer than that, and you should be following up asking for an answer to your demand.
Staying on top of your follow up deadlines is important show you are serious about your deadlines. Write the actual date on your letter to remove any doubt in your opponent’s mind. Seeing that detail indicates you are serious about pursuing your claims. Conclude this by stating you will pursue legal remedies if they fail to pay your demands by the said time.
6. Make Several Copies of Your Letter and Send
If you decide to send things out initially by email, do not delete your email and keep a copy of the replies. Take screenshots as your backup. In this digital world, many people use email exclusively. However, the key here is you must receive a reply.
If you do not, you must send your demand letter via certified mail with a return receipt requested. Make a copy of all the pages of your letter before sending it out. Keep one set for yourself.
Then keep a copy of your post office receipts for your records. Make it a point to keep a copy of all correspondence coming from your opponent, too.
Certified mail is best for demand letters because if you do end up in small claims court, you have proof that you sent something out. The return receipts that you have can counter your adversary’s claim that they did not receive any letter. Besides, in some areas, the letter must be sent out 30 days before and with proof of receipt before you can file any complaint in court.
Demand Letter Benefits
Outlining and drafting your demand letter will take time and effort. Doing so, however, will provide you with many benefits. If you enlist the guidance of an attorney to polish your document, you can look forward to better outcomes. Check out the benefits of writing a demand letter:
Promotes Settlement of the Issue
The most important benefit of a clear demand letter is that it gives you and your opponent a chance to skip the trouble of litigating a case in court. The points you lay out in your demand will force the recipient to evaluate the time and effort it will take to defend their case.
Of course, you can go to trial long down the road, and if you win, the other side may end up paying more, especially attorney’s fees and punitive damages. But sending a demand letter is the first step in that process and helps articulate that if all goes well for you at trial, here are the consequences to the other side.
Shows You Are Serious
If you are stuck in a dispute with another person or organization, you have most likely sent text messages, written emails, or made calls. They may ignore you in the hopes that you get tired. Your adversary may think you do not intend to pursue legal action, and you may only need to blow off steam.
Sending a demand letter, though, especially one drafted by a lawyer, shows you mean business. Your opponent may view the possibility of a cumbersome lawsuit as imminent. As a result, they will take your claims for damages more seriously.
Courts See It as Good Faith
From the judicial system’s point of view, a demand letter indicates that the party sending the document wants to resolve the issue amicably. The courts appreciate it when they see that the plaintiff made every effort to resolve the issue before filing a lawsuit.
A demand letter shows that you did not immediately pursue litigation, and you were hoping for an amicable settlement. Besides, in some localities, the aggrieved party is required to send a demand letter before filing a case in court.
Saves on Precious Resources
A demand letter can save you a lot of time, money, and effort. Although you will need to commit countless hours to drafting and assembling your demand package, if the at-fault party decides to settle, it will save more time and money down the road by avoiding a lawsuit. This is a win-win situation for everyone.
Helps Organize Details of Your Case
Taking the time to outline the history of the dispute helps you keep your evidence organized. As you go through the history and facts of the case, you gather evidence to support your position. Laying everything out in a demand letter will show you what you’re missing or what the other side has to contend with if they decide to fight you in court. At the very least, it better prepares you for litigation.
Remember, filing a claim in court is all about proving your assertions. When you have everything organized, you have a better chance of winning.
Sample Demand Letter
Check out a copy of a sample demand letter below, this will give you an idea of what this letter looks like. You can pattern your first draft here, then ask a lawyer for guidance to polish your final correspondence.
“Home Contractor Letter
June 20, 20xx
Beyond Repair Construction
10 Delaney Avenue
You recently did replacement tile work as a part of a remodeling project on my downstairs bathroom at 142 West Pine Street. On May 17, 20xx, I paid you $4,175 for completion of the job per our written agreement. Problems with your work surfaced two weeks later.
Specifically, on June 1, I noticed that the tile in the north portion of the shower had sunk almost half an inch, with the result that our shower floor was uneven and water pooled in the downhill corner before eventually going down the drain.
In our telephone conversations, you claimed that the problem was in my imagination, was my fault, and was minor. This response is unacceptable. I did not receive the competent remodeling job that I paid for and must hire someone else to fix the problem.
Please forward $1,200 (the cost of redoing the work per the enclosed estimate from ABC Tile) within ten days or arrange to repair the work yourself. If I do not hear from you by June 15, 20xx, I will promptly file a lawsuit in small claims court.
Remember, although an attorney is not required to write your demand letter, having one as your ally will ensure that you get your desired outcome. Usually, recipients feel the gravity of the situation when they receive a letter directly from a law firm.
If you need assistance, contact our team at Breakstone, White & Gluck. We offer free case evaluations. You can also count on us to expertly draft a demand letter for all of our retained clients.