A demand letter is a manuscript, both official and professional, sent by one party to another to demand them to pay or do something else to correct something they did wrong. The party receiving the demand letter might have financially defaulted, might be involved in a breach of contract, or may have refused to do as obliged.
Lawyers compose demand letters for their clients. They are sent to the recipient before the lawyer and his client files a lawsuit. Demand letters, nonetheless, are not requirements for taking a person to court. A demand letter summarizes the damage demands for a recipient to pay if they had defaulted, gives a time limit, and outlines the impacts if the recipient does not meet the conditions.
Simply put, a demand letter aims to resolve any disputes before the aggrieved party takes formal legal action by taking the recipient to the court of law.
Once You Send a Demand Letter, What Follows?
After sending a demand letter, the recipient may decide to meet the demand by agreeing to every aspect of the demand, and making payments as agreed. In some instances, the recipient may have a counter offer. A counter-offer means that the recipient did not agree with every condition, but they are willing to pay.
Counter-offers do not have to be agreed to every time. Sometimes, the aggrieved party might also make their counter-offer requesting for something else. There are also those parties who choose to refuse the demand by refusing to make any payment. When this happens, the aggrieved party may now file a lawsuit.
Components of a Demand Letter
Sometimes you might choose to compose a demand letter yourself rather than having a lawyer do it for you. As you open the letter, you must include its purpose then describe what damages were done. Lastly, make a demand to be restituted. Some parties choose to give the recipient a specific deadline to honor the demands before filing a lawsuit. Moreover, you may also include the effects of not meeting the demands.
As you compose a demand letter, make it short and straight to the point. Simplify your intent properly. Long letters are not ideal as they hurt the usefulness of the letter. A short, straight-to-the-point letter indicates seriousness to seek legal action. If the demands of the letter are not met, and a lawsuit is filed, the judge may decide on checking the letter for conciseness and rule in favor of the aggrieved party.
What to Avoid When Drafting Demand Letters
As you compose a demand letter, ensure that you do not threaten or disparage the other party. Also, desist from using a language that shows you are frustrated or angry. Your main aim is to reach an agreement; therefore, you should create a positive mood. The other party needs to see your seriousness.
You can also allow them to consider their legal choices. A demand letter is not a chance to insult the other party or make a combative relationship. If the recipient does not honor your demands and you follow the litigation route, remember that the judge will read the demand letter. This is why you need to ensure that your letter is respectful and professional.
A demand letter tries to resolve a conflict without litigation. It opens a concession process between the aggrieved party and the recipient. It explains the aggrieved side of the story, the amount owed, and the settlement they want. If litigation ensues, the letter will prove to the court that you had all the intentions to settle the dispute with the other party.