What is a demand letter?
A well-crafted demand letter is one of the most effective tools for protecting, preserving, and enforcing clients’ rights. But you don’t have to be a lawyer to send a strong, meaningful demand letter. Anyone can draft one if they understand the basics and know how to avoid some common mistakes.
In a nutshell, a demand letter is a piece of written correspondence that puts someone on notice of a potential legal claim you have against them and that requests (or “demands”) a specific resolution of the claim. A strong demand letter accomplishes three objectives:
- It explains the basic facts and legal basis for the claim you may have against someone
- It clearly states the resolution you seek
- It communicates your willingness to take formal legal action if necessary to achieve resolution
Attorneys regularly write demand letters to notify others of a wide range of legal disputes, including breaches of contracts, failures to pay for goods and services, and personal injury claims, to name just a few.
How To Write a Formal Demand Letter
It takes care, attention to detail, clear writing, and a firm grasp of the facts and relevant legal principles to write an effective demand letter. You can write a letter that serves your purposes and accelerates the resolution of the dispute.
Here are the essential steps in writing a formal demand letter:
- Begin with a clear statement of who you are and your purpose in writing the letter. For example: “I am the owner of XYZ Manufacturing. I am writing to request that you immediately pay for the 1,000 widgets we shipped to you last month.”
- Briefly summarize the facts and any legal/contractual arguments that support your demand. For example: “On June 1, 20XX, you ordered 1,000 widgets from XYZ by phone. We confirmed your order by email dated June 2, 20XX, to which you responded affirmatively on June 3, 20XX. In responding, you agreed to abide by our standard Terms and Conditions, which require payment within 14 days of shipment of the widgets and provide for the interest of 10% on all late payments. We shipped the 1,000 widgets to you on June 14, 20XX. We did not receive payment by June 28, 20XX, as required. You are therefore in breach of your payment obligation to XYZ.”
- State the resolution you seek. For example: “We hereby demand immediate payment of your balance due. Please contact our billing department for the payoff amount, which, per our Terms and Conditions, will include penalty interest.”
- Finally, make clear your willingness to take any necessary legal action to achieve your desired result. For example: “Failure to pay your balance, plus penalty interest, may force us to take legal action against you. XYZ reserves all of its rights in that regard, including the right to seek liquidated damages, attorney fees, and costs, as outlined in our standard Terms and Conditions.”
Do’s and Don'ts of Writing a Demand Letter
There are some common mistakes that people make when writing demand letters. Keep these do’s and don’ts in mind to ensure success.
- Be clear, direct, and concise. The fewer the words, the stronger their impact.
- State the facts plainly and stick to the essentials. Fancy language and extraneous details are unnecessary.
- Leave no doubt about how you want the matter resolved. The recipient should know exactly where you stand.
- Resort to emotional language, exaggeration, or name-calling.
- Make threats, especially threats of violence or threats to accuse someone of a crime. This is illegal and could subject you to criminal penalties.
- Overreach by demanding far more than the law allows. Shooting high is ok, but the recipient might not take an unrealistic ask seriously.
Why would you need to write a demand letter?
The core purpose of a demand letter is to put the other party on notice of a potential legal claim against them. Notice plays a significant role in the law. In a dispute between two (or more) parties over money, property, or legal obligations, the date of notice often serves as the benchmark for evaluating a party’s legal rights and duties or for the amount of damages that a party might owe.
In some instances, you must give notice to assert your rights. Alternatively, some statutes and regulations require an injured party to give notice of a claim for that claim to mature. For example, in many states, you must give notice to government entities if you plan to assert a personal injury claim against them. Commercial contracts sometimes require giving notice as a prerequisite to asserting a breach of a party’s obligations.
In other instances, giving notice isn’t strictly required, but it’s still an important means of protecting and enforcing your legal rights. If you do not give notice of a claim via a demand letter, the other party could assert ignorance of your complaints about their actions as a defense. A demand letter leaves no doubt that the other party knows you think you’ve been wronged, that it owes a duty or compensation to you, and that you will resort to litigation.
What happens after a demand letter is sent?
Once you send a demand letter, you cannot necessarily control what happens next. Ideally, the recipient will do what you ask — and sometimes, that’s just what happens. A well-crafted demand letter can get you exactly what you want.
Oftentimes, however, demand letters only begin the process of resolving a dispute. The recipient of a demand letter might, for example:
- Respond to your demand with a counter-offer, which can lead to settlement discussions
- Respond to your demand letter explaining their disagreements with the facts or legal arguments contained in your demand letter
- Take legal action against you or another party, or engage in other legal processes (such as seeking bankruptcy protection) to avoid liability to you
Finally, sometimes a demand letter is met with silence. In those instances, you may have no choice but to take legal action to enforce your rights.
Do you need an attorney for a demand letter?
You don’t necessarily need an attorney to prepare a demand letter, but it can help. Legal professionals write demand letters as a matter of routine. They have lots of practice in crafting letters that maximize your chances of achieving the desired result. They also know how to plan for and take legal action if your demand letter’s recipient refuses to play ball.
Many people find that they can craft their own demand letters in low-stakes situations, such as a dispute that might end up in small claims court, but that leaving the writing to an experienced legal professional is best in higher-stakes scenarios where a disagreement might lead to lengthy litigation before a judge and jury.
Hiring a skilled legal professional to write a demand letter, however, does not need to be a strenuous process. Case Works offers high-quality demand letter writing services for businesses and individuals who want to protect their rights.
The Main Purpose of a Demand Letter
Demand letters serve to put someone on notice that you may have a legal claim against them. They aim to achieve your desired resolution by stating your case firmly and directly, without hyperbole or overreach. A well-crafted demand letter can bring your dispute with another party to a swift resolution, or at a minimum, protect your rights in anticipation of future litigation.
If you need help writing a demand letter, contact Case Works to inquire about our demand letter creation services.