What is a Demand Letter?

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Man hand holding pen, writing a demand letterAs the name implies, a demand letter “demands” that the letter’s recipient take specific actions to resolve a conflict. Demand letters are frequently used by businesses to demand restitution or the payment of a debt, and they often serve as a precursor to a lawsuit.

In general, a demand letter contains all of the following: a short history of the dispute; a demand that a specific action be taken by a specific date; legal justification for the demand; and what the sender of the letter will do if the other party fails to meet the demand.

Let’s take a closer look at three benefits of using demand letters as well as some mistakes that must be avoided.

Demand letters show recipients that the matter in question should be taken seriously. Perhaps a business has tried phone calls, emails, and other methods to collect a debt… all to no avail. A properly worded demand letter may make the recipient realize that the consequences of continuing to ignore the matter can be severe.

Demand letters are more economical than going to court. Hiring an attorney to draft and send a demand letter is considerably less expensive than filing a lawsuit and engaging in a time-consuming court battle. Even if the lawsuit is successful, the legal fees could be substantial, and it is by no means certain that any resulting award will be collectible.

Demand letters can be helpful if the matter does end up in court. Courts appreciate efforts to settle matters out of court. Sending a demand letter, preferably by certified mail and regular mail, shows the court that the sender genuinely wanted to resolve the matter and made a sincere effort to do so. Similarly, courts may look unfavorably upon parties that ignore properly drafted demand letters.

The “wording” of a demand letter is crucial. You want the letter to be taken seriously by the other party, of course, but demands must be made in accordance with applicable laws. Unreasonable demands should be avoided, and the tone of the letter should not be overly aggressive, threatening, or insulting. Remember: Information contained in a demand letter can be used against you. Therefore, even though it is not a legal requirement to have an attorney draft and send a demand letter, it is a very good idea.

To discuss your specific needs and goals, we invite you to call the Law Offices of Clifford M. Cohen at (202) 895-2799 and schedule a meeting. We can meet in-person at our office or virtually via Zoom and other platforms.