A demand letter is a formal written letter sent by one party to another to demand a specific action or to address a grievance or dispute. These letters are often used in a legal or business context and begin the informal process of resolving a potential legal issue.
What is a Demand Letter For?
A demand letter typically serves as the first step a party takes before pursuing legal action against another party. In the letter, the sender will assert their rights, make a claim against the receiving party, and provide a possible resolution or demand for some sort of payment or performance.
Most parties send a demand letter after informal discussions and negotiations have failed and the issue needs to be escalated. It is common for demand letters to be used in the following situations:
- Demand for payment. A demand for payment is one of the more common uses for a demand letter. This occurs when one party fails to make an agreed upon payment to another party. This letter should include the amount owed, the due date, and an express demand for payment to be made.
- Demand for performance of a contractual obligation. When a party breaches the terms of a contract, the non-breaching party will often send a demand letter before filing a breach of contract lawsuit. The demand letter will notify the breaching party of their violation and request either specific performance like corrective action or payment for any damages that were incurred because of the breach.
- Personal injury or property damage. After an accident that involves personal injury or property damage, the damaged party will send a demand letter to the party who caused the accident or to the party’s insurance company. The letter will detail the damage or injuries and demand compensation like payment of medical bills or for costs related to property repairs.
- Employment disputes. If an employee suffers wrongful termination, discrimination, unpaid wages, or any other workplace dispute, a demand letter can be used to inform the employer of the complaint and request a resolution like compensation.
- Cease-and-desist letter. A cease-and-desist letter is a form of a demand letter that is sent to a party to demand they stop engaging in activities or behavior that causes harm to the sender. These letters are commonly used in intellectual property disputes, or stalking and harassment cases, and defamation suits.
Demand letters can be used in a variety of situations, but their main purpose is to put a party on notice of a legal issue, dispute, or grievance. After the letter is received, the resolution process can begin which can include negotiations, alternative dispute intervention, or filing a lawsuit and seeking intervention from the courts.
How Powerful is a Demand Letter?
While a demand letter isn’t legally enforceable or binding, it can still be a powerful way to put a party on notice of pending legal action and ensure that the offending party takes the claims seriously.
Demand letters are sent before a lawsuit is initiated. This makes them a practical and cost-effective precursor to litigation. In most cases, once a party receives a demand letter and realizes that the opposing party is serious about pursuing legal action, they are more likely to cooperate in negotiations to resolve the issue.
Do Attorney Demand Letters Work?
Yes, attorney demand letters work and can be effective in a variety of legal situations. While it is possible to draft and send your own demand letter, the most successful demand letters are drafted by experienced lawyers who know what information must be included in this legal document.
Attorney demand letters work for the following reasons:
- Demand letters written by attorneys will be drafted with legal expertise and printed on law firm letterhead. This level of professionalism is more likely to cause the receiving party to take the claims seriously.
- When you hire a lawyer to draft and send a demand letter, it displays your level of seriousness and adds credibility to your claim.
- A lawyer will be able to site applicable laws and include credible legal arguments in the demand letter. This can increase the likelihood of a cooperative response from the recipient.
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Next Steps After Getting a Demand Letter
If you have received a demand letter, there are a few steps that you should take to protect yourself and your interests.
- Step 1. Review the claims. When you receive a demand letter, you need to review the claims made in the letter and make sure that you understand the sender’s complaint and demands. This will help you determine what type of lawyer you may need.
- Step 2. Consult with an attorney. Demand letters are serious legal documents and are often followed up with litigation. If you receive a demand letter, you should always consult with an experienced attorney. An attorney will help you understand the claims, go over the facts and the law pertaining to the legal issues, and help you draft a response.
- Step 3. Gather evidence. You will want to gather and preserve any evidence or documents related to the claim in the demand letter. This can include contracts, emails, invoices, receipts, accident reports, or any other records pertaining to the legal issues.
- Step 4. Draft a response. Most demand letters include a deadline for a response. You can work with your attorney to draft a tactful response that acknowledges the receipt of the letter and addresses the claims.
After you send a response, you can prepare for dispute resolution. You will typically begin with negotiations but if that fails, you may have to prepare for litigation.
Is a Demand Letter Serious?
Yes. A demand letter is serious because it is usually a precursor to litigation. The demand letter demonstrates that a party has a potential legal issue and is willing to take action to get the issue resolved. If a lawsuit is filed and the case proceeds to court, a judge may treat the case more seriously if a credible demand letter was sent before pursuing litigation.
What Not to Say in a Demand Letter?
A demand letter should have a professional tone and include a clear description of the dispute, a demand, and a deadline to respond. Here is a list of things NOT to say in a demand letter:
- Personal attacks and inflammatory statements against the other party
- False statements and exaggerations of the facts or claims
- Irrelevant information
- Threats or intimidation tactics
- Personal or emotional statements
- Unprofessional language, inappropriate language or slang
Hiring a lawyer to draft your demand letter will help ensure that the letter is professional and is free from mistakes and unnecessary information.
What Does it Mean if You Get a Letter from a Lawyer?
If you get a demand letter from an attorney, you can assume that the sender is taking the claims in the letter seriously and is ready to file a lawsuit if you fail to respond to the letter or participate in dispute resolution.
For this reason, if you receive a demand letter, it is highly recommended that you set up a consultation with an experienced attorney to learn about your rights moving forward.
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