When someone owes you money or sells you something defective, how can you resolve the issue without going to court? Your best bet often is to begin with a demand letter.
Although we often have a negative connotation for the word "demand," this type of letter can serve as a way to start a discussion about a dispute. The document gives you the opportunity to put your side of the issue in writing and often allows both parties to come to an agreement without the time and expense of a lawsuit.
What is a Demand Letter?
A demand letter (also called a letter of demon) is a legal document one party sends to another party in an effort to resolve a dispute. The letters typically involve money owed or a payment to settle some type of grievance or obligation. A demand letter -- which often follows more informal attempts to solve the problem -- is often the first step before the sender takes legal action.
Although lawyers are the ones who usually write demand letters, you can write one yourself in the following situations:
- You have a straightforward legal issue – such as a small claims case -- that does not require the services of an attorney.
- You want to clarify the details of a breach of contract and what you want to happen next.
- You want to save legal expenses by drafting the letter for your attorney’s review.
Importance of Writing a Demand Letter
Writing a demand letter gives you the opportunity to explain the dispute and all the details that pertain to it. Here are the three main benefits of writing a demand letter
- Increases the chance of a settlement. If your first attests to resolve the issue, such as phone calls and emails, have been unsuccessful, a demand letter shows the other party that you mean business.
After receiving a demand letter, the other party will know that you are not just going to go away. A carefully written demand letter reveals that you want to come to an agreement but that you are prepared to file a lawsuit if necessary.
-
Helps you organize your case. Writing the letter helps you think through all the details of the case and express them in a well-organized, coherent manner.
A demand letter should include all the pertinent details of a case, including dates, descriptions of goods, fees, and previous attempts to contact the other party. The letter sets forth the reasons supporting your position and states how you would like the issue to be resolved.
- Saves time and money. A well-written demand letter saves both parties time and money. When you negotiate through letters, you save expensive attorney and court fees. Even if you do end up having to go to court, the document is an important starting point for the whole legal process.
Types of Demand Letters
There are as many types of demand letters as there are legal disputes. Here are the most common types of demand letters:
Payment Owed: This type of demand letter involves the payment of an outstanding debt. The letter should explain the reason for the debt, the amount owed, and the original due date. If the writer will settle for a lesser amount as repayment of the loan, the letter should offer these details (called the "terms of settlement") and when that adjusted payment is due.
Action Required: This letter should include a description of the task or service being requested, why it is being requested, and when the action should be completed,
Insurance Claim: This demand letter is written to an insurance company and should provide the date of an accident or other incident, details of the injury, and medical expenses. The letter should include the settlement amount and a deadline for a response.
Non-Sufficient Funds (NSF) Check: An NSF demand letter seeks payment after a debtor's check is returned by the bank due to insufficient funds. The documents should include the payment amount, the bank’s name, and check number. You also can ask for repayment of postage and bank fees.
Stop Payment: This letter requests payment after a debtor places a stop payment on a check. It should include the check number, payment amount, date of issue, and the bank’s name. You can request reimbursement for postage and bank charges.
How to Write a Demand Letter
There is no set length for a demand letter. Instead of worrying about length, it’s more to consider its tone and its attention to detail. Here are tips for writing a successful demand letter.
What to Include in a Demand Letter
A demand letter should include the following information. Aim to be as concise as possible as you handle each step
Facts – Include the dates of when and where the initial transaction or incident took place. Also, include your full name and address and the recipient’s full name and address.
Claim – Clarify exactly how much money you have spent and how much you are owed. If it is a service you require, be clear about what you expect.
Evidence – Cite any information that will support your case, such as the legal contract or the loan agreement.
Resolution – Explain what expect from the other party to resolve the breach of contract.
Deadline – Give a deadline for a response. State that you pursue legal action if there is no response.
Use Correct and Polite Language
The tone of a demand letter is just as important as the information it contains. You may have already tried the informal route with a phone call or an email, but the demon letter is the time to use a more professional tone. Here are some tips for setting the right tone in your letter:
- Leave your personal feelings and emotions out of the letter. Stick with the facts.
- Avoid any derogatory language or name-calling.
- Call the other party by “Mr. or Ms. (last name)” rather than by their first name.
- Avoid over-explaining the situation or including unrelated information.
Be Concrete, Clear, Detailed, and Reasonable
A demand letter is not the time to make unreasonable or unsubstantiated demands. If there is a sequence of events that pertain to the incident, it often helps to put them in chronological order. If there are supporting documents (loan agreement, bills, invoices, or other correspondence) that will help clarify the matter, attach them with your letter.
Here’s a rule of thumb to keep in mind – if you won’t be able to prove it in court, don't put it in the letter.
Make Copies and Use Certified Mail
If you are sending a demand letter yourself without the help of an attorney, you should make sure you retain copies of the letter. It’s also important to be certain the other party receives the letter.
When you send the letter by certified mail, you can get a confirmation of receipt using a tracking number used by the U.S. Postal Service.
Although the name “demand” letter can sound as if you are being aggressive, this type of document can go a long way in reconciling a legal dispute in an amicable manner. Just remember to organize your information, use a professional tone, and be as brief and concise as possible.
Helpful Resources:
When someone owes you money or sells you something defective, how can you resolve the issue without going to court? Your best bet often is to begin with a demand letter.
Although we often have a negative connotation for the word "demand," this type of letter can serve as a way to start a discussion about a dispute. The document gives you the opportunity to put your side of the issue in writing and often allows both parties to come to an agreement without the time and expense of a lawsuit.
What is a Demand Letter?
A demand letter (also called a letter of demon) is a legal document one party sends to another party in an effort to resolve a dispute. The letters typically involve money owed or a payment to settle some type of grievance or obligation. A demand letter -- which often follows more informal attempts to solve the problem -- is often the first step before the sender takes legal action.
Although lawyers are the ones who usually write demand letters, you can write one yourself in the following situations:
- You have a straightforward legal issue – such as a small claims case -- that does not require the services of an attorney.
- You want to clarify the details of a breach of contract and what you want to happen next.
- You want to save legal expenses by drafting the letter for your attorney’s review.
Importance of Writing a Demand Letter
Writing a demand letter gives you the opportunity to explain the dispute and all the details that pertain to it. Here are the three main benefits of writing a demand letter
- Increases the chance of a settlement. If your first attests to resolve the issue, such as phone calls and emails, have been unsuccessful, a demand letter shows the other party that you mean business.
After receiving a demand letter, the other party will know that you are not just going to go away. A carefully written demand letter reveals that you want to come to an agreement but that you are prepared to file a lawsuit if necessary.
-
Helps you organize your case. Writing the letter helps you think through all the details of the case and express them in a well-organized, coherent manner.
A demand letter should include all the pertinent details of a case, including dates, descriptions of goods, fees, and previous attempts to contact the other party. The letter sets forth the reasons supporting your position and states how you would like the issue to be resolved.
- Saves time and money. A well-written demand letter saves both parties time and money. When you negotiate through letters, you save expensive attorney and court fees. Even if you do end up having to go to court, the document is an important starting point for the whole legal process.
Types of Demand Letters
There are as many types of demand letters as there are legal disputes. Here are the most common types of demand letters:
Payment Owed: This type of demand letter involves the payment of an outstanding debt. The letter should explain the reason for the debt, the amount owed, and the original due date. If the writer will settle for a lesser amount as repayment of the loan, the letter should offer these details (called the "terms of settlement") and when that adjusted payment is due.
Action Required: This letter should include a description of the task or service being requested, why it is being requested, and when the action should be completed,
Insurance Claim: This demand letter is written to an insurance company and should provide the date of an accident or other incident, details of the injury, and medical expenses. The letter should include the settlement amount and a deadline for a response.
Non-Sufficient Funds (NSF) Check: An NSF demand letter seeks payment after a debtor's check is returned by the bank due to insufficient funds. The documents should include the payment amount, the bank’s name, and check number. You also can ask for repayment of postage and bank fees.
Stop Payment: This letter requests payment after a debtor places a stop payment on a check. It should include the check number, payment amount, date of issue, and the bank’s name. You can request reimbursement for postage and bank charges.
How to Write a Demand Letter
There is no set length for a demand letter. Instead of worrying about length, it’s more to consider its tone and its attention to detail. Here are tips for writing a successful demand letter.
What to Include in a Demand Letter
A demand letter should include the following information. Aim to be as concise as possible as you handle each step
Facts – Include the dates of when and where the initial transaction or incident took place. Also, include your full name and address and the recipient’s full name and address.
Claim – Clarify exactly how much money you have spent and how much you are owed. If it is a service you require, be clear about what you expect.
Evidence – Cite any information that will support your case, such as the legal contract or the loan agreement.
Resolution – Explain what expect from the other party to resolve the breach of contract.
Deadline – Give a deadline for a response. State that you pursue legal action if there is no response.
Use Correct and Polite Language
The tone of a demand letter is just as important as the information it contains. You may have already tried the informal route with a phone call or an email, but the demon letter is the time to use a more professional tone. Here are some tips for setting the right tone in your letter:
- Leave your personal feelings and emotions out of the letter. Stick with the facts.
- Avoid any derogatory language or name-calling.
- Call the other party by “Mr. or Ms. (last name)” rather than by their first name.
- Avoid over-explaining the situation or including unrelated information.
Be Concrete, Clear, Detailed, and Reasonable
A demand letter is not the time to make unreasonable or unsubstantiated demands. If there is a sequence of events that pertain to the incident, it often helps to put them in chronological order. If there are supporting documents (loan agreement, bills, invoices, or other correspondence) that will help clarify the matter, attach them with your letter.
Here’s a rule of thumb to keep in mind – if you won’t be able to prove it in court, don't put it in the letter.
Make Copies and Use Certified Mail
If you are sending a demand letter yourself without the help of an attorney, you should make sure you retain copies of the letter. It’s also important to be certain the other party receives the letter.
When you send the letter by certified mail, you can get a confirmation of receipt using a tracking number used by the U.S. Postal Service.
Although the name “demand” letter can sound as if you are being aggressive, this type of document can go a long way in reconciling a legal dispute in an amicable manner. Just remember to organize your information, use a professional tone, and be as brief and concise as possible.
Helpful Resources:
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