How to Write a Formal Demand Letter
Most people want to avoid court at all costs and prefer to negotiate a mutually beneficial outcome. The first step in this process is a demand letter which explains the facts of this dispute and proposes a solution. This article will explain why you should send a demand letter and how to do so.
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What Are The Benefits of a Demand Letter?
Often, demand letters are unavoidable as most courts require you to send one before filing a lawsuit. However, there are many benefits to sending a demand letter.
- A demand letter allows you to bring the issue to the other party’s attention and kickstart the negotiation process on your terms.
- It provides a written summary of the facts of the issue and your attempts to rectify the situation.
- It promotes case settlement outside of court. Rather than calling or visiting the other party to complain, a demand letter shows you are serious and failure to resolve the issue will result in legal action. Most businesses want to avoid the time and money a court case requires and will seek to negotiate a settlement.
How to Prepare a Demand Letter
When you prepare the demand letter, keep your goal at the forefront of your mind. You want the overall tone of your letter to be business-like to show you are serious. The ultimate goal of the demand letter is for the other party to weigh up the pros and cons of settling.
Your demand letter should make the defendant consider:
- How much time will defending a lawsuit take?
- What damage will my business sustain from a public lawsuit?
- What is the likelihood of losing?
- How much will it cost me to lose?
- Will a settlement be better financially and for my business image?
These questions should not appear in your letter, but these are the things you want to address when writing your demand letter.
How to Write a Demand Letter
Here are a lawyer’s top tips for writing a successful demand letter:
- Type it up – Your demand letter should be typed, not handwritten. If you do not have a computer at home, access one at a public library.
- Clearly outline all the facts – This demand letter will serve as a written record of all the facts. Do not assume the defendant knows all the facts, as there might be things they don’t know or have forgotten. With all the facts laid out clearly, the defendant will see the reality of the case and be able to judge the likelihood of them winning a lawsuit. If the case does go to court, your demand letter will be submitted as evidence and will lay out the initial dispute and further communication up to this point. Write your demand letter as if you are informing a judge of the facts of the case so far.
- Be polite – Write your demand letter in a business-like manner. Avoid any personal attacks and angry language; instead, write clearly and confidently. Remember, this letter may be shown as evidence in court, and a calm witness is more believable.
- Ask for what you want – Do not beat around the bush, if you want $1,000, ask for it once you have laid out the facts. Because a demand letter is often a starting point for negotiation, ask for a little bit more than what you want so you can negotiate down to it. Explain in the letter how you have calculated the figure by outlining any monetary losses you have suffered, such as medical bills, property damage, and lost wages. Keep these figures factual as you will have to provide proof if the case goes to court.
- Set a deadline – Set a clear deadline of how long your opponent has to pay before you seek legal action. Generally, one week or two is best, the more time you give them, the more the defendant will delay dealing with you. Write the deadline as an actual date to ensure there is no confusion. Clearly state that failure to remedy the situation by that date will result in legal action.
How to Send a Demand Letter
- Make copies and keep them safe – Copy every page of each letter you send before you mail it. Also, keep a copy of the post office receipts. Keep a copy of any responses from the defendant. If you send the demand letter or have any email correspondence, keep copies of all emails and replies.
- Use certified mail – Always send demand letters by certified mail and request return receipt. This way, you can prove the defendant received your letter if you end up in court. It is acceptable to send the demand letter by email, however, if you do not receive a response, send the letter again by certified mail.