Has someone broken an agreement with you? Legal experts recommend writing demand letters for breach of contract in such cases. Learn all about these letters in our mini-guide. We include a free template at the end that lets you write an appropriate letter.
What Is a Demand Letter for Breach of Contract?
A demand letter for breach of contract – also referred to as a “notice of breach” – is a formal document that notifies the recipient of the following:
- The recipient has breached the contract in some manner, as stated in the letter.
- They are expected to make things right or the contract is considered void and you are seeking damages from them.
Like demand letters, the breach for contract demand letters makes a specific demand from the other party. This demand is based on the nature of the agreement and state laws. The recipient is given a due date by which they can meet the demand.
When and Why Do You Write a Breach of Contract Demand Letter?
You write a breach of contract demand letter after you determine a breach of contract is made:
- The other party has broken an agreement with you.
- You determine the breach was unprofessional and caused you a major problem.
- You want the party to pay you or perform some other action.
- You want to put pressure on the party, without taking it to court.
You may or may not be legally obligated to write a breach of contract demand letter. Here’s why you need one anyway:
- The letter gives you an opportunity to put pressure on the other party.
- It may save you time and money down the road.
- The letter allows you to organize the case.
- You may be obligated to send a letter, according to the terms of the contract.
Warning – Make Sure You Are in the Clear
Contracts usually have a notice clause. These notice clauses dictate how you have to communicate the breach – by letter, email, or fax – and when. If the procedure isn’t followed, your letter may not be considered an official notice.
It’s also a good idea to ensure you’ve held up your end of the agreement and you can prove the other party has broken theirs. Note that you have a few years after the breach has occurred to take the other party to court.
What Is Included in a Demand Letter for Breach of Contract?
Here are the essential details to include in the demand letter for breach of contract:
- The date: The date must be noted judiciously. It could be critical if the case goes to court. Make a record and make sure the date is prominently mentioned at the top of the letter.
- The breach: The breach should be described in detail. There may be multiple breaches. If so, all breaches must be mentioned. List the clauses in the contract related to the breach(es). Breaches are usually one of three categories:
- The other party doesn’t pay or perform an obligation.
- The other party states they won’t perform an obligation in the future.
- The other party makes it impossible for you to perform an obligation.
- The solution: If it’s not too late, you should give the other party an opportunity to make things right. This includes including what you expect them to do and a date to do it by.
- The demand: When it’s not possible to fix the breach, you could mention you consider the agreement canceled and ask for damages.
Tips When Writing a Demand Letter for Breach of Contract
- Make sure you consult the notice clause and send the contract to the right person –the one who signed the contract.
- Write in a respectful, professional tone. An emotional, threatening, or sarcastic letter is a strict no-no.
- While you may send demand letters for both non-material and material breaches, a non-material breach is not considered to be the end of the agreement.
- Send the letter by the means specified in the contract.
- Sign your name at the end of the letter.
- Make copies of the letter – you may need them later.
- Be prepared to send follow-up letters or discuss counteroffers.
No one wants to go to court over a contract breach. A notice of breach puts pressure on the other party and could help you save time and money. Use the template provided below to write an appropriate demand letter for breach of contract.
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