A demand letter is the first step to bringing a case to court, and in many ways one of the most important steps in a dispute.
A poorly written demand letter can be dismissed by the other party and leave no choice but to litigate. A properly written demand letter will show the other party there is a legal issue requiring them to act (or cease acting), that you take this conduct seriously, and that you know your rights.
The difference between a poorly written letter and a clear and structured letter may determine whether the matter is resolved quickly or it escalates to litigation.
Here are four important guidelines to writing a demand letter:
1. Write for the Recipient
Lawyers can tend to use “legalese” which often complicates the matter and confuses the reader. The best demand letter is one with language that is written for the specific reader. If the recipient is a business partner who understands common terms of business, you should use these terms. However, if the recipient is a layperson who doesn’t understand the terms you are using, it is likely to make them anxious and avoidant. A person who does not understand a letter is unlikely to make a meaningful response to it.
2. Write with Structure
A demand letter should be clear, concise, and complete.
A demand letter that is confusing, lengthy, and partial will only cause delay and conflict while the parties are forced to go back and forth to determine each other’s version of facts and respective positions.
A basic demand letter would have the following basic structure:
- The date, the other parties’ name and address (if available), and the person you are addressing (if the other party is a business);
- A summary of the contents of the letter;
- A chronological outline of the events including any relevant facts;
- An outline of the relevant law or relevant provisions of a contract (as the case may be);
- How the other party has violated their obligations under law or contract;
- How you have suffered damages (and if quantifiable, by what amount); and
- A demand that the other party act, desist, or provide relief (as the case may be) by a certain deadline, and if seeking relief, how payment or a response can be made.
When you have evidence of an event or a breach, be as detailed as possible. For example, instead of stating that the other party promised to pay you $1000 for a service, attach a time-stamped email wherein they make you that promise.
If there are various legal issues or parties, this will complicate the structure of your demand letter and it would be best if you had a lawyer draft or at least review it.
3. Write What is Relevant
A demand letter is not the place to vent your frustrations. If a perceived wrongdoing by the other party has nothing to do with the relief you are seeking, do not include it. For example, if your demand letter to your neighbor is demanding that they cease trespassing onto your land, it is not a place to say that the neighbour is abrasive, or their music is too loud. This will only delay a resolution.
Additionally, if your description of an event is coloured by your personal feelings, it is unlikely to lead to a resolution. If another party is in breach of a term of contract, it is not helpful to accuse them of being in breach so that they can destroy your business or ruin your reputation. Do not assume malice unless there is evidence that the other party is intentionally trying to cause damage or avoid their obligations.
If you have any questions regarding what is or is not a relevant fact, consult with a lawyer.
4. Write to Resolve the Issue
A demand letter should be professional, calm, and seek to resolve the matter. If you have any doubts as to whether the letter is civil, picture it being read by a judge without any other context. Will it paint you as a reasonable person?
A demand letter should not escalate the issue, it should direct the parties towards a solution. The letter should be clear that you are not seeking to litigate – you will only be forced to file in court will only occur if the parties cannot come to an agreement. If your letter simply threatens to litigate without offering any solution to the issue, the other party will not have any incentive to respond reasonably.
Response to Your Demand Letter
Sometimes, a demand letter is enough to make the parties aware of their legal obligations and will resolve the issue. However, often a party will simply respond with a denial letter stating why you are wrong, and they are right. Do not take these letters personally, and if the response letter is abusive or unprofessional, do not respond in kind. Use the response letter as a basis for what the other party is likely to say in court and determine how you will respond to each allegation during negotiations or during litigation.