How to Write a Demand Letter to Resolve a Dispute and Stay out of Court
If someone owes you money, personally or professionally. Instead of suing them, you can try to solve the problem, with a demand letter. You don’t have to be a lawyer to write a demand letter. In fact, anyone can write one and send it to their debtor to try to resolve the issue without having to go to court.
However, that being said, if your dispute is complex, or the amount of the money involved is high, it is a good idea to get a lawyer to write it for you.
Small Claims Court – To Sue or Not to Sue
I was a litigation paralegal and legal assistant for 12 years. Now I have my own business providing a variety of writing services. Writing demand letters is one of them. Since I brought up suing above, I want to say a couple of things about that.
First of all, I am not a lawyer, and have no legal training so I can never give anyone legal advice. Just because I worked with lawyers for 12 years doesn’t mean I have ever studied the law, or have the capacity to practice law. My job was to prepare documents, various types of letters, gather and organize data and give client/lawyer support, under a lawyer's direction.
However, I do know this about suing. If the amount owed to you falls under the jurisdiction of small claims court, government agencies and government websites have tonnes of information on how to sue someone in small claims court. If the amount you’re owed is too large to fall under the jurisdiction of small claims court, you have to sue in a higher court so you should get advice from a lawyer.
What is a Demand Letter?
It is a formal notice that demands a debtor to perform a certain legal obligation. This includes rectifying a problem, paying a certain sum, or honoring an agreement. The demand letter also gives the person receiving the letter a chance to perform the obligation.
Writing and sending a demand letter is not suing them. You can decide that as your next step if your debtor doesn’t meet the terms you set out in your demand letter.
A Demand Letter is Not a Guarantee
Writing and sending a demand letter does not guarantee that you will get what you want, and the situation will be resolved. The recipient might ignore your letter, or tell you they will do a specific action as you demanded, to appease you, and then never do it.
What a demand letter does is explain your position, and what you want them to do to rectify it. I have watched a lot of episodes of Judge Judy and The People’s Court. So I can say that a lot of litigation could be resolved, if both parties were clear on what the dispute was, and exactly what the Plaintiff wanted the Defendant to do.
Now we can get into the specifics of how to write a demand letter.
The Tone, Style and Goal of a Demand Letter
Tone: Write your letter in a professional direct and firm way. Don't be overly nice, but also don't be hostile.
Style: As with any writing, remember who you're writing the demand letter to. Use this as a guide for the working you will use. You want to make sure they understand your letter.
Goal: The goal of your demand letter is to convince who you're writing to that its in their best interest to settle with you, by using facts.
After writing the letter, sign it and make a copy. Send the original letter to the recipient, and keep the copy. Send the letter in a way that you can confirm that you sent it and they received it, such as certified or registered mail.
More Tips on How to Write a Demand Letter from Attorney Robert Todd
What to Include in a Demand Letter
After the recipient reads your demand letter, they should:
- Understand your issues clearly
- Know exactly what you want them to do.
Your Demand Letter Must be:
- Reasonable, and your terms need to be fair.
- Clear, concise, to the point, and written in plain English. Ideally, a demand letter should only be one to one and a half pages long.
- Polite, and don’t attack them personally.
- Your letter should never use inflammatory language, or misstate facts.
Include the Following in your Letter:
There is a sample demand letter at the end of this article.
- The date and the contact information for yourself and who you’re writing the demand letter to.
- How the letter is being sent, for example: Sent by Certified or Registered Mail
- Write out “DEMAND LETTER” in the body of your letter (don’t use quotes), to tell who you are writing to what you are demanding, so they can act accordingly.
- Write “Without Prejudice” (use the quotes) in the upper right hand corner.
- Summarize the Issue or Problem – Don’t be too wordy.
- Specify what you’re demanding.
- Give the recipient a deadline to do what you’re demanding.
- Tell the recipient what you plan to do if they don’t respond to your demand letter within the time frame you've given them.
A Demand Letter is About Stating Facts, Not Emotion
What Not to Include in a Demand Letter
A demand letter needs to be as honest and as specific as possible. A demand letter should never contain threats or assumptions.
Your emotions are probably running pretty high, particularly if the person who owes you money is a friend or relative. Although, when a business doesn't fulfill their obligations it can be just as frustrating.
A demand letter is not the place to write about feelings. Why?
Because the purpose of a demand letter is to summarize the history, set out issues that have followed after the original agreement or incident, and a proposal (Demand) detailing how you want the issue be resolved. The purpose of a demand letter is not to make sure the person receiving your letter understands that you’re angry, or frustrated.
When to Send a Demand Letter
You can send a demand letter to give the other person a chance to rectify a situation, if they haven’t fulfilled their obligations. However, it is not a prerequisite to taking legal action unless a contract requires it, or if it is legal action on promissory notes.
After you have decided to send a demand letter, don’t put it off - there are deadlines for taking legal action, such as suing them.
Sample Demand Letter
September 30, 2013
Sent By: Certified Mail
John Doe Address
Dear Mr. Doe:
RE: Our Agreement - Delivery of 10 Cows on August 30, 2013 for $10,000.00
On August 30, 2013 I gave you, as per our agreement, $10,000.00 for 10 cows.
At the auction we both attended on August 30, 2013, we agreed that I would pay you $10,000.00, and you would deliver 10 cows to my residence at 101 Tranquility Lane on September 7, 2013. As of today’s date, I have not received the cows.
On, or about September 6, 2013, you advised that your driver was in an accident and would not be able to deliver the cows on September 7, 2013. So we changed the date to September 10, 2013.
On September 10, 2013 the cows were not delivered, and I didn’t receive a telephone call explaining why.
To date I have not received a phone call from you, or any contact at all. I have phoned you many times, but each time I call the person who answers can’t speak English.
Accordingly, because I do not have possession of the cows, and have not heard from you, I demand that you:
- Courier my refund for $10,000.00 by certified check, no later than October 14, 2013 to my home address.
If I am not in receipt of a certified check in the amount of $10,000.00 by the end of business on October 14, 2013 I will commence an action in (the court where you are) without further notice to you.
If you have to include enclosures, make sure you refer to them in the letter, and how many you're enclosing.
What You Put in Each Part of the Letter
Sent By: Certified Mail
Name and Address of the Recipient
RE: What the main focus of the letter is. What transaction lead to you writing the demand letter, or reference numbers.
This is where you summarize what happened, the purpose of your letter, and identify the problem. Use only the facts. Use dates if you can, if you can’t use (on or about). To add more details, use two or more paragraphs in the body of your letter.
Carry on from the introduction and use facts to support your position.
You can use this part of the letter to set out:
- Dates of meetings, telephone calls, emails, or any other types of contact. But if it has gone on for years, keep it brief or try to summarize the dates. Remember you don't want it to be longer than 11/2 pages long.
Use whatever information and facts you can to prove your position and that you are being reasonable.
Specify what you’re demanding: Use bullet points so it’s easy to read, if you have more than one demand. I demand that you (the action you want them to take).
Give them a deadline: Give them a specific date, or say in two weeks from the date of this letter, or ten days from receipt of this letter, or the end of business on (give a date). Make sure that the date you give is not on a weekend.
What you will do if they don’t comply: Tell the recipient what you plan to do if they don’t respond to your demand letter within the time frame you've given them.
In the footer, type out your name, address, phone number, cell number, and email address.
A Demand Letter Is Worth a Try
Litigation is stressful and time-consuming. If there’s a way to settle a dispute before suing someone, it’s always best to go that route. Some cases take years to settle.
"Litigation is the basic legal right which guarantees every corporation its decade in court." - David Porter
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