Need to Send Demand Letter

Demand letters are courtesy to maintain some goodwill between business parties and they often prompt payment, avoiding expensive litigation. There are various reasons why a person thinks of sending a demand letter. Usually a person will send a demand letter after a failed attempt to get restitution or payment for an obligation or commitment done by the other party.
Some of the most common reasons for sending a demand letter are:
Someone owes you money
It may be due to a mutually agreed upon contract.
Someone owes you an obligation in some way
It could be the case of an agreement completing a job or task for the other party, but failed to follow through on their obligations. Here in this case, a demand letter is sent to force the party to complete the job.
For insurance claims after an injury
During the settlement negotiation process, a demand letter is often sent by the injured party to the insurance carrier of the accused party. The demand letter is sent to claim the total damages incurred by the victim and compensation.

How to Write a Formal Demand Letter

Nobody wants to go to court if the issue can be resolved without any legal action. Sending a demand letter is the first step to settle the dispute by negotiating the process. The demand letter explains the whole matter, the amount you are claiming incurred in bulls, and the total amount in the settlement you are requesting. The demand letter is a kind of open invitation to settle the dispute with the opponent. Once you send your demand letter, if the possibilities of the settlement fail, a small claim court is the next step and possible solution to settle the dispute.

Demand Letter Benefits

A demand letter often contains the “threat” that if it is not adhered to, the next communication between the parties will be through a court of law in the form of formal legal action (i.e. pleadings). Most of the courts require you to make a formal demand letter for your payment before filling your lawsuit in the court. Although it is almost always a good initiative to send a demand letter before instituting legal proceedings, demand letters are not generally prerequisites for a legal action but there are exceptions such as legal action on promissory notes or if the contract requires it. Your demand letter will catalyze the settlement with the opponents. Moreover, explaining your matter in the demand letter will make it easier for you to organize the matter in an ideal way. A demand letter urges and boosts case settlement.

Demand Letter: Urges Case Settlement

One advantage of an unmistakable, demand letter demanding the disputed amount is that you probably won’t experience to have the difficulty of recording a small claim case. Regardless of whether you have fruitlessly contended with your opponent face to face or via telephone, spreading out the reasons, you’re owed money in a demand letter shows some action. With a demand letter, you and your dispute get a concrete face that cannot be neglected anymore. The other party will have to face the fact that you won’t just disappear. Furthermore, on the off chance that you sue, it will require significant investment and energy to defend a case. Even worse, you may win. So, the chances of you getting paid will increase when you put forth your defense recorded in a writing form.

Demand Letter: Helpful in Organizing the Case

Demand letters are powerful tools in a lawyer’s arsenal. In small claim court, you have to prove your case with evidence. When you write your demand letter, you will set fourth your position. You build grounds to prevail. You are better prepared for your case with facts, law and evidence. A demand letter will help you to think through every aspect of your case. It is good practice to demand an apology and a retraction before taking legal action.

Preparing Your Demand Letter

While writing a demand letter, keep your goal in mind. One way to avoid a costly and time-consuming lawsuit is to present a demand letter to the other party, as a way to start a discussion.

Summarize at the Beginning

In a sentence or two, tell the main point you want to make about the damage done, then give your demand for payment or other damages.

Establish Facts

While writing a demand letter, write your version of the facts so that if you end up in court, you have a document that sets forth the nature of the dispute. The facts should include your attempts to resolve the dispute. Refer to email, conversations, or other communications that demonstrate that legal action is the last resort.

Refer to Evidence

If you have evidence (like a contract), you don’t need to include it, but you should refer to it in the demand letter. You need not attach the actual contract in your demand letter, but save it in case you need to use it as evidence in court later on.

Make a Demand

Be specific to what you want. If there’s an issue of fact about whether your opponent is actually at fault for the incident, explain why you believe the recipient owes you this money.

Set a Deadline and Establish Method of Payment

In your demand letter state a reasonable deadline based on the amount of money owed. If the amount is higher, you even offer the possibility of payment installments.

Offer a Consequence

Through your demand letter, let the recipient know that if your demands aren’t met, what you are planning to do (i.e., file a lawsuit).

Be Professional

Be direct and calm, leaving your personal feelings out of the descriptions. Don’t use abusive language or call the other party names. Being clear, direct and professional will help your case.

Be Complete and Detailed

Include details of dates, numbers, amounts of money. Include in the letter:

  • Your full name and address
  • The description of the unfair or deceptive act or practice, with dates and details, including any law you believe has been broken
  • The injury you suffered, in measurable terms, including loss of money, damage to something you own, or being the victim of an unfair practice
  • Your demand for relief, including the money you want
  • When and how the other party must respond

Be Reasonable

When you are stating your demands, make them as reasonable as you can. Types of damages include

  • Compensatory Damages
  • Punitive Damages

Be Honest and Truthful

Be honest and mention the actual facts. Avoid any wrong allegations and charges that you cannot prove later on.

Make and Keep Copies

Make a copy of each letter before you send it, and keep a copy of the post office and receipts. Keep all correspondence from your advisory. If you are going to send a demand letter via email, be sure not to delete it and keep copies of all replies.

Use Certified Mail

Send a demand letter via certified mail with a return receipt requested. You can use the return receipt in the small claim court as a proof that your opponent did not receive the demand letter.

Outcomes of the Demand Letter

Once the demand letter is sent, various outcomes could occur. This could include:

  • The demand is met
  • A counter offer is made
  • The demand is refused

When to Consult an Attorney

If you fail to reach resolution after sending a demand letter, you could file in small claims court or consult a personal injury attorney. In small claim court, you can appear yourself without an attorney. Approaching a small claim court will bound the defendant to appear in the small clam court. If the opponent does not appear in a small claim court, a default judgment will be rendered in your favour.

If you are unsure about what to include in a demand letter, how to phrase it, or whether you are making an accurate and compelling argument, consider talking to an attorney. A demand letter from a law firm versus one that is sent from an individual carries much more weight. An attorney will have the legal experience necessary to properly craft the demand letter and ensure that all points are mentioned.

Sample Demand Letter

Repair Demand Letter

Date: ………………..

To: ……………

You have not paid a debt owed to ……………….., which you incurred on …………………. The amount remaining unpaid on the debt is …………………. Demand is hereby made that this money be paid. Unless payment of this amount is received by the undersigned no later than ………….., a lawsuit will be brought against you in the Commercial Claims part of …………………… City Court in order to obtain a judgment against you.

Our records show that you have made the following payment(s) in partial satisfaction of this debt ……………………………………………………………………………………………………………………………………………….

A copy of the original debt instrument or other document underlying the debt is attached.

The names and addresses of the parties to the original debt transaction are:


If a lawsuit is commenced, you will be notified of the hearing date and you will be entitled to appear at the hearing and present any defenses you may have to this claim.


Sample Demand Letter for personal Injury









Date _________________, 20____



Dear _________________,


This letter is recognized as official notice that payment is being demanded for the car accident that occurred on _________________, 20____. The total demand amount, after calculating direct payments along with the pain and suffering of the event, is  $______________.


A breakdown of the total amount is as follows:


INJURIES/TREATMENT: $______________

OUT-OF-POCKET EXPENSES: $______________

LOST WAGES/EARNINGS: $______________

PAIN AND SUFFERING: $______________




On _________________, 20____, at approximately ____:____ ☐ AM ☐ PM the following accident occurred as described: ____________________________________








Directly due to the car accident I had to sustain the following medical treatment: ______






As a result of the car accident I was required to come up with the following out-of-pocket expenses: _____________________________________________________________






After the car accident, I lost the following wages and earnings as described: _________






In consequence to the described events, I suffered the following: __________________




After careful consideration of the issues involved in this claim, and a review of jury verdicts and insurance company settlements with similar fact patterns, I believe the total demand amount is represents a fair and equitable settlement amount.





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