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Most people are surprised to learn that most lawsuits are settled outside of court. That is why most people will send a demand letter as a way to settle their dispute before filing a lawsuit. A demand letter is a letter outlining a set of requests you would like the other person to fulfill. Wondering how to write a demand letter? In this article, we discuss how to write a demand letter, what to include in a demand letter, and provide demand letter templates.
Did you know we have a free tool powered by AI that helps you create a demand letter? Check out our demand letter tool.
Why is a Demand Letter Important?
A well-crafted demand letter can be a useful tool if you are trying to settle a dispute outside of court and is a recommended pre-litigation step. Here are at least five reasons to first send a demand letter before suing someone in court:
Depending on the state you are filing a lawsuit in, you may be required to demand payment from the other party before filing. For example, in California small claims court demanding payment is a requirement. A demand letter is an effective way of completing this requirement.
A demand letter can help you better organize your case. If you end up filing a lawsuit you will need to make a concise claim and prove your case to a judge. Writing a demand letter will help you think through every aspect of your case, including the important facts, your legal arguments, and the evidence you'll need to prove your claim. With a demand letter, you will be prepared for litigation even before you file a lawsuit.
A demand letter signals to the other party that you are serious about the dispute and willing to take action to resolve the problem.
Sending a written demand letter assures you there is a record of your attempt to settle. So while demands for settlement or negotiation efforts can be made orally, we recommend making any offers in writing. There is also no restriction on text messages, but writing a letter can sometimes be very effective as it is a more formal way of sending making a demand to the other party.
The most important reason to send a demand letter is that it may lead to a settlement without having to go to court.
Do I Need to Hire an Attorney to Write a Demand Letter?
Many of our clients ask us if they need an attorney to write a demand letter. Ultimately, the decision is up to you. There is no formal requirement that states you need a lawyer to write your demand letter, you can do it on your own.
Here are some considerations when deciding whether to hire a lawyer to help you write a demand letter:
Legal fees can add up quickly. Even if you just need a lawyer to help you write a demand letter this could end up costing you more in the long run.
If you have a complicated legal case you may need help understanding the law. For example, if you were in a car accident that resulted in personal injuries you may want to consider speaking with a personal injury attorney as personal injury law can be quite nuanced.
What to Avoid in Your Demand Letter
There are no set rules for demand letter writing, however, these are general tips for what to avoid when writing a demand letter.
Do not use disparaging language. In general, try not to use language that will convey to the other party you are angry or hostile.
Avoid making threats. This letter could end up in court if you and the other party do not come to a settlement. Any threats or made-up facts can be used against you later.
Do not fabricate facts. As mentioned above, if you end up going to court over the dispute the judge will read your letter at the hearing. Any facts you claim in the demand letter may be brought up in court and will require further explanation. Avoid looking petty or shady in your letter and in court by being as professional as possible throughout the whole process.
Remember the goal of a demand letter is to be able to come to a settlement outside of court. You want your demands to be met, however, you do not want to further escalate the situation.
What to Include in Your Demand Letter
Unsure of what to include in your demand letter? Below we have included suggestions on the most important things to include in your demand letter.
What to Include at the Top of Your Letter
Include your contact information. The other party needs to have a way they can reach you in case they would like to accept your offer.
Include information on how the letter is being sent. For example, if you sent your demand letter by certified mail add a line that states this at the top of the letter.
Include a concise statement of how much money you are owed. At the beginning of your letter, include a statement that clearly states how much you are demanding the other party pay you. For example, if you are a business owner and your client owes you $5,000 for services rendered, this information should be clearly stated at the top of the letter.
What to Include in the Body of Your Letter
Include the most important facts. Consider the “who, what, where, and when” of your dispute. For example, if you are suing an auto repair shop for damages to your car you will want to include who in the auto repair shop is responsible for damaging your car, how your car was damaged, when did you take your car to the auto repair shop, what was wrong with your car before and after you took it to the auto repair shop, etc.
Make sure to include any settlement offers and the terms of the settlement. For example, you hired a contractor and they damaged your wood floors. You want to settle the case so you offer the contractor to come back and restore the damage. Include things like what areas you want repaired, and by when you want the repairs made.
Include how you would like to receive payment. Consider using Venmo or Paypal if you know the other person well. If not include your mailing address so they can mail a check to you.
What to Include at the End of Your Letter
Include other forms of settlement you are open to. State whether or not you are open to things like mediation before court. Mediation is a great option for parties who have a long-standing relationship with each other and want to continue to have a relationship after a dispute has occurred.
Include a deadline. You may want to consider giving the other person 14 days to respond to you and state that if they do not respond within that time, you intend to sue them.
Add your signature. At the end of the letter sign your name.
Attach any documents or other pertinent evidence. For example, if you are sending a demand letter to your client for outstanding payments attach the outstanding invoices you sent your client to the demand letter.
Be polite in your demand letter. Remember you are trying to settle the case not escalate the matter any further.
Sample Demand Letters
Below is a sample demand letter. This sample letter discusses a broken agreement between a homeowner and a contractor. When using this sample replace those facts with facts from your situation and insert the relevant information of your dispute in:
[Other Party’s Name]
[Other Party’s Address]
RE: [insert subject line]
Dear[Other Party’s Name],
I am contacting you demanding payment for[amount owed]. I am attempting to resolve this out of court, but if we cannot come to an agreement, I intend to sue.
Here is a statement of my case that I intend to submit to the court:
I entered into an agreement with [other party’s name] that stated they would come to my home and build a backyard deck. The agreement stated [other party’s name] would come [date on the agreement] and start working on the deck. [Other party’s name]did not show up on the date of the agreement or any time after that. As per the terms of the agreement I paid [other party’s name] $3,000 in advance so they could buy the necessary equipment to build the deck. I am now demanding $3,000 from [other party’s name] for breaking our agreement.
I look forward to resolving this matter amicably and I am amenable to discussing mediation. You may contact me at[your email]if you would like to discuss this matter further. Please send me a check payable to my name to the address listed above.
If I do not hear from you by [14 days from now], you leave me no alternative but to file a lawsuit against you. In the event of a lawsuit, I intend to seek redress to the fullest extent permitted by law including, but not limited to, additional damages, legal services costs, court costs, and accrued interest.
[Your Name & Sign Above]
Do you want to learn how to write a specific type of demand letter? Here are some of our other articles:
How to Send a Demand Letter
We recommend sending your demand letter via email or mail. For letters that you mail, consider the following:
Tracking. Make sure to track your demand letter. With tracking, you will know if the letter reached the other party or not.
Signature Required. You do not necessarily need a signature request. When you send a letter with a signature request, the postal carrier must hand-deliver the letter and the other person must sign the letter.
Once the post office attempts delivery 2-3 times, the post office returns the letter to the sender as "undeliverable." We don't recommend sending demand letters to individuals at a home address with a signature required. A signature-required mailing does work better when you send the letter to a business that is open during regular delivery hours.
What to do If the Demand Letter Doesn't Work?
If you sent someone a demand letter and do not receive a response you may want to consider suing them in small claims court. Small claims courts handle a variety of cases at a low cost. This is because small claims courts were intended to be affordable and user-friendly. In some small claims courts, attorneys are not even allowed to represent you! Consider filing a small claims lawsuit if you are not able to settle your dispute outside of court.
Common types of small claims lawsuits
Small claims courts handle a wide variety of cases. You can sue in small claims court so long as there isn't another court better suited to hear the case. The most common types of small claims cases are:
Disputes between landlords and tenants over the security deposit.
Disputes between landlords and tenants over unpaid rent.
Disputes between individuals over money owed. For example, you lent your roommate money for rent and they did not pay you back.
Breach of contract disputes.
Disputes between two drivers after a car accident. For example, you were driving your car and got into an accident that lead to property damage to your car.
Disputes with auto repair shops for damages to your car.
Disputes between homeowners and contractors over remodeling or home repairs.
Disputes between individuals over property damage.
Disputes between a business owner and clients over outstanding invoices.
Chief Legal Architect & Co-Founder @ People Clerk. Camila holds a law degree and is a certified mediator. Her passion is breaking down complicated legal processes so that people without an attorney can get justice.