March 18, 2009

How to Write a Demand Letter

A demand letter is a formal, written notice demanding that the recipient perform some legal obligation, most often, the payment of a debt. In many cases, a demand letter is all that is necessary to convince the other party to do what they are legally required to do. But even where a demand letter is ignored, it can serve a useful purpose by proving in court that the other side had notice of the claim and chose not to respond.

At a minimum, a demand letter should concisely set out the facts which led to the claim as well as the specific actions you are asking the other side to take in order to resolve the matter. Beyond that, here are some tips for writing an effective demand letter:
  1. Imagine you are writing to a judge...because that’s who may end up reading your letter. In some cases, demanding payment from the other side is a prerequisite for bringing a claim, so your demand letter may be evidence that you fulfilled this requirement. Also, in many cases, the demand letter is useful evidence that you told the other side of the problem and gave them an opportunity to rectify it. Since the letter may end up in court, keep the language and tone of your letter firm, professional and unemotional. Be careful to consider whether you are admitting anything in the letter which may be used against you by the other side in a trial. Write the letter on a computer rather than by hand, and keep it to a page or two at the most.
  2. Include details. While it is important to keep the letter brief, you should still set out the history of the dispute, including all the important details, such as the dates of a contract, exact dollar amounts owing, details of building deficiencies, etc.
  3. What do you want? Set out specific actions that you want the other person to take; “I demand that you pay me the $1,234 owing to me for fixing your car.” or “I demand that you repair my fence which you damaged with your lawnmower.”

  4. When do you want it? Set a deadline, but make it reasonable. Two or three weeks is generally a good time frame, since it allows time for the other person to get the letter through the mail and make arrangements to remedy the situation.

  5. Or else what? Include consequences for failing to perform the legal obligation. For example, “If I am not in receipt of a certified cheque in the amount of $1,234 by August 14, 2009 then I will commence an action in Small Claims Court (or the British Columbia Supreme Court, depending on the type of claim and the amount) without further notice to you.”

  6. Contact information should always be included, along with your name and signature. Make sure that the other person has a way to get in touch if they would like to discuss the claim or settlement with you.

  7. Send it by registered mail. Registered mail costs less than $10 and allows you to get a receipt proving that the other side received the demand letter. Keep this receipt as evidence in case you eventually go to court.

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