A demand letter is a document sent by one party to another to deliver notice that the sender would like to resolve a dispute and is considering legal action. It is not required, but is often advised that an attorney write a demand letter on a client’s behalf. The letter will describe the disagreement between the two parties and demand a specific resolution.
A demand letter is usually sent to avoid having to file a claim in court and go through litigation, which is often a long and expensive process. The letter is usually the first step in the negotiation process.
What should a demand letter include?
The letter will try to convince the recipient that their chances of success in litigation are low or that the expense and time of litigation are very high and not worth the effort. The letter should outline:
- The facts and purpose of the letter
- The parties involved
- A description of all damages suffered by the sender
- The demand for restitution
- A deadline for meeting demands
- Any consequences for failing to meet demands
Suppose there are no deadlines or consequences listed in the letter. In that case, the chances of a recipient responding are significantly lower, and the sender may not achieve the intended purpose of the letter.
What to do if you receive a demand letter
It’s important not to ignore a demand letter and take time to review and respond to the letter if you ever receive one. Before taking action, it is recommended that you speak with an attorney. As a recipient of a letter, you have the option of following through with the request outlined in the letter or responding with your own letter denying the claims. You are not obligated to respond to a demand letter, however, the sender may file a lawsuit against you if you do not answer.
Ultimately, the demand letter indicates that the sender is serious about reaching a resolution. Demand letters are not legally required, but most courts will consider sending a letter as a measure of good faith to try and reach a resolution.