The demand letter is a precursor to litigation. When you write a demand letter, you give the recipient a chance to right a wrong before you take them to court. We cover everything you need to know about demand letters here. We also provide a free demand letter template at the end of the article, if you wish to write a suitable one quickly.
What Is a Demand Letter?
A demand letter is a formal document asking payment or other action. If you send a demand letter to someone, it’s because they have aggrieved you in some way. Common disputes include financial default, contract breaches, and unpaid wages.
Lawyers typically write demand letters, though anyone can write them. You don’t need to write a demand letter to take someone to court. However, it’s highly recommended you write one anyway, simply because they save you time and money in the long run.
Demand letters are sometimes referred to as “letters of demand for payment” and “cease and desist” letters. As a rule of thumb, they are sent by certified mail with a return receipt. This is so the sender can verify the delivery.
When and Why a Demand Letter Is Needed?
There are many scenarios where you could need to write a demand letter:
- Car accident
- Child support
- Final Notice
- Personal injury
Why do you write a demand letter if you aren’t legally required to do so? It’s better than taking the recipient to court directly, which is costly. Demand letters show the other party you’re serious about the matter at hand. In many cases, it causes them to give in to your demand.
What Are the Benefits of Writing a Demand Letter?
Writing a demand letter will work in your favor:
- Avoid litigation: You may potentially be able to avoid litigation by writing a demand letter and seeking out-of-court resolution. Litigation is likely to be a major commitment, taking a lot of time and money.
- Put pressure on the recipient: A demand letter is seen as a serious step. The recipient is forced to sit up and take notice.
- Show of good faith: The judiciary’s time is valuable. That’s why any attempt to resolve a matter before you use judicial resources is seen in a positive light.
- Save time and money: Litigation is expensive and even if you win, you may not end up with much. A demand letter is worth the try.
- Prepare your case: Demand letters have to be well-thought-out and carefully written. Drafting a demand letter may give you valuable insight into the matter at hand.
What Is Included in a Demand Letter?
Attorneys generally recommend including all the following in the demand letter:
- The nature of the business relationship or transaction
- The exact problem with details
- A description of prior resolution attempts
- Make an actionable demand
- Provide an exact amount or action needed
- Optionally offer repayment alternatives
- Attach documents as evidence – like receipts or photos
- State what you intend to do if the demands are not met.
Make sure to write the demand letter in a professional, non-threatening manner.
While anyone can write a demand letter, we recommend getting your attorney involved for legal advice. Also, you might want to use the free demand letter template we have on the CocoSign website. It should help you create an acceptable formal letter.
CocoSign offers free letters and other official documentation templates for a wide variety of scenarios.
Demand Letter FAQs
How long should a demand letter be?
There are no set lengths for demand letters. They can be as long or as short as necessary, though most attorneys advise you to keep them brief. We recommend covering the matter concisely. Don’t talk about unrelated subjects.
What tone should I use in the demand letter?
Always, always write demand letters in a professional, formal way. Be careful to not use threatening language, lest it’s seen as an extortion attempt. The demand letter may later be used against you in court, so it’s a good idea to keep it as professional as possible.
Can a demand letter be sent by email?
Yes, a demand letter can be sent by email – it has no legal value, so the method of delivery is not relevant either. However, we recommend sending the demand letter by mail or courier in addition to email. It is more formal and shows you made an effort to reach the recipient.
What happens after a demand letter?
One of three things will happen after you send a demand letter:
- Your demand will be met: While rare, the recipient may accept all your demands and make the payment immediately.
- You will receive a counter offer: This is much more common. They may agree to meet a portion of your demands. They may also agree to discuss the matter with you.
- Your demand is refused: They may refuse to meet the demand. In this case, you can proceed with a lawsuit.
How long does it take for the issue to resolve after the demand letter?
If the recipient is amenable to a settlement, it may take a month or two for them to make the payment. In high-value settlements, it can take multiple months. If you take them to court, it could take even longer.