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Knowing when you will reach a settlement after sending a demand letter can be hard to predict. Ultimately, many factors are at play, and you could reach a settlement with the business or individual you have a dispute against in a couple of weeks or months if they chose to come to an agreement with you. Below we will go over some of the main factors, and what you can do if you haven’t reached a settlement after sending a demand letter.
Here are the main factors to consider:
Who is the dispute against?
How long did the other party have to respond?
The complexity of your claims and your case.
Does the other party find your demands reasonable?
They may think you’re bluffing.
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1. Who Is the Dispute Against
One of the main factors that will affect how long after sending a demand letter you can expect a settlement is whether the dispute is against a business or an individual. This is because if you are dealing with a business that has a legal team, there are more people involved, and more coordination is required.
Here are some common examples of disputes against businesses:
You enter into a consulting agreement with a big corporation. Based on the agreement, you would be paid at the end of the project. However, the corporation never pays you for your consulting services. You send the corporation a demand letter for breach of contract. While they may agree to settle with you, they have to have their accounting team issue the check and mail it to you.
You have a dispute against an airline for lost luggage, so you send a demand letter to their legal team. After sending the demand letter, you wait to get in contact with one of the airline’s attorneys to discuss how to settle this matter and get reimbursed for your lost luggage.
Don’t be discouraged if there is a delay (but watch out for any potential statutes of limitations). If you believe they are ignoring you or dragging you along, you can escalate and sue in small claims.
When the other party you are dealing with is an individual, a settlement may be a lot quicker as you can speak with them directly, and the negotiations between you two will likely be less formal.
Here are some common examples of disputes against individuals:
You move out of your apartment, and your landlord doesn’t return your security deposit, so you send them a demand letter. Once your landlord receives your demand letter, they may reach out to you directly via phone to talk about how to resolve the issue or even send you a check right away.
You lent someone money, and they haven’t paid you back, so you send them a demand letter. If the person has your phone number, they may reach out within a couple of days to discuss the matter over the phone.
2. How Long was the Deadline to Respond
Review the demand letter you sent. Did you include a deadline to respond?
If you didn’t include a deadline to respond, you may want to send a second letter with a deadline. 14 days is a common deadline.
If you included a deadline, the receiver will know that you expect their response by that deadline, otherwise, you will likely take legal action against them.
Sometimes, by law, you may be required to give more time to the other party, meaning you will have to wait longer for a possible settlement. For example, under the Texas Deceptive Trade Practices Act (DTPA), you are required to send written notice to a business that violated a provision under the act and give the business 60 days to respond. This means that the business has at least 2 months to think about your demand letter and consider settling any claims you bring.
This may also be the case for demand letters that you send to insurance companies. In some states, they may have more time by law to answer any claims brought in demand letters. If the insurance company is also dealing with other individuals and their claims, they may be prioritizing cases depending on the deadline. This also will affect by when you can expect a settlement.
If you forgot to provide a deadline in your demand letter, consider sending a follow-up letter with a deadline.
3. The Complexity of Your Claims and Your Case
The complexity of your claim and the facts of your case will factor into how long after you send a demand letter you can expect a settlement. For example, if your case involves a car accident with multiple parties and you send a demand letter to an insurance company, the insurance company may want to reach out to not only you but those other parties before making any settlement offers.
If you also suffer injuries because of the car accident scenario described above, this may also impact how long you will have to wait for a settlement. This is because some claims involve areas of law, like personal injury, that are more nuanced and may require more evidence and back-and-forth negotiations.
If you have any questions or concerns about your claims because your case is complex, involves several parties, or involves nuanced legal topics, consider reaching out to an attorney. For example, if your case is about a car accident where you suffered personal injuries, consult with a personal injury attorney.
4. Does the Other Party Find Your Demands Reasonable
Once the other party receives your letter, they will likely take time to think over the demands you made in your demand letter, the facts you demonstrated, and what evidence you may have attached to your letter. If you send a clear and concise demand letter with reasonable demands, the other party may be more likely to settle any claims quickly.
However, if you used antagonistic language in your demand letter or made demands outside of what the other party is potentially liable for, you could be hurting your chances of reaching a settlement within a reasonable timeframe.
5. They May Think You’re Bluffing
If you don't get a response or the other person doesn't make any offers to talk about your demands, they may be waiting to see if you will actually take legal action. Usually, when you send a demand letter, you are initiating the settlement process and demonstrating that you are serious about pursuing your claim. Some people may receive a demand letter and think it’s a bluff because they think filing a lawsuit is complicated. However, small claims courts were designed as a quick, affordable, and user-friendly way for everyday people to resolve disputes.
What if the Demand Letter Doesn’t Work?
Did you send a demand letter and didn't receive a response within a reasonable timeframe, or was the response inadequate? It may be helpful to follow up with the business or individual by sending a final demand letter, or if all else fails, consider suing them in small claims court.
Legal Educator @ People Clerk. Claudia holds a J.D. degree and is a certified mediator in New York and Florida. She has participated in dozens of small claims mediations in New York City courts.