A demand letter is a formal notice used to inform someone that they owe you restitution for the damages they caused you and ask them to remedy the situation; else, you take legal action. It can be sent to someone who owes you money, breached a contract, or otherwise failed to fulfill an obligation. Typically, people send this letter before taking legal action against the reader.
Some disputes may require that you sue the offending party, but most people would rather avoid court proceedings if possible. This is why many aggrieved parties send a letter to initiate negotiations towards a favorable settlement. Below is all you need to know about how to write a formal demand letter.
Benefits of a Demand Letter
While a formal demand letter is not legally necessary to file a lawsuit, many courts require that you draft one. This is because the document performs several functions that may be beneficial to your case like:
- It catalyzes case settlement
- It allows you the opportunity to organize the facts of your case
- It provides an opportunity for resolution without going to court
- It acts as evidence that you tried to solve the dispute
Things to Consider When Drafting a Demand Letter
Always formulate specific goals before drafting a formal demand letter. Essentially, you want to convince the reader that it is in their best interest to solve the case outside of court. You can do this by drafting your letter in a way that makes them question the following:
- The duration of a lawsuit
- The public exposure that follows a court case
- Their chances of winning the case
- The cost of losing the case
- Whether they can settle out of court for less money
You also want to mind the language you use when preparing this document. Never attack the reader personally, even if you have every reason to be angry. Present your claim and evidence in a calm and rational manner to encourage the reader to respond similarly.
How to Draft a Demand Letter
It is highly advisable to type your formal demand letter on standard paper and follow a professional format. A handwritten letter might be ineligible and take away from your argument. Once you have everything in place, follow these steps to draft your letter:
Step 1 – Outline the Facts
Start by making a record of how the initial dispute arose, including dates, locations, and any agreements signed. Mention any prior attempts to solve the dispute, such as unanswered calls and emails. While this may seem like busywork, it is crucial to ensure that you and the reader are on the same page. This part is also crucial as a judge may read your demand letter, and you want to paint a clear picture of the issue.
Step 2 – Make Your Demand
Don’t beat around the bush when asking for compensation. Explain exactly how the reader’s actions or inactions affected you financially and stipulate all your losses. For example, if you were injured in a car accident, mention your medical bills, lost income, and pain and suffering.
Once you have established your damages, go a step further and assign them a dollar value. Provide the total, while leaving yourself room to negotiate, and attach the relevant receipts and invoices.
Step 3 – Provide a Timeline
When would you like to hear from the reader? Set a deadline for when the dispute should be resolved to motivate the reader to act promptly. Generally, you should provide a timeline ranging from 7 days to 2 weeks at most and mention a specific date to eliminate any doubts.
Step 4 – Set the Consequences
Finally, let the reader know that you are willing to take legal action should they fail to respond by the given deadline. Don’t be vague about this part. For example, say ‘I will file a lawsuit against you’ instead of saying ‘you will suffer the consequences.’
How to Write (Video)
Formal Demand Letter Format
{Date}
{Recipient’s Name}
{Recipient’s Address}
{City, State, Zip Code}
Re: {Nature of Demand}
Dear {Mr./Mrs./Ms. Last Name},
On {date}, {describe incident in detail}. These events led to {briefly mention your losses}, which could not have happened if {explain why you believe the reader is responsible}. I am, therefore, writing to demand restitution in the form of {indicate type of damages}.
The stated amount will go towards covering the following losses {provide a list of damages with dollar amounts}. I have attached {relevant documents, e.g., invoices}.
I expect you to resolve this matter by {deadline}. If I don’t, I will be forced to {legal consequences of noncompliance}. You can contact me at {contact information} if you have any questions.
Sincerely,
{Your Name}
{Your Signature}
Sample Car Repair Demand Letter
19 April 2031
Brian Langdon
300 Green State Road
Austin, TX 09112
Re: Compensation for Vehicle Damage
Dear Mr. Langdon,
On 2 April 2031, you borrowed my car to use as part of the vehicle procession in your wedding. We signed an agreement stating that you would have used the car for 2 days and returned it in perfect condition. Despite this, you returned it with a huge dent in the bumper.
I paid $2,000 to Yule Motors for the repair work, a cost I would not have undergone had you stuck to our agreement. I have enclosed the invoice, and I am writing to demand that you send me this amount in full within 10 days of receiving this letter.
If I don’t receive payment by 29 April 2031, I will file a lawsuit in small claims court.
Sincerely,
Phyllis Jeremiah
Sample Home Contractor Demand Letter
18 April 2031
Delilah Rosso
Ross Roofing and Restoration
761 Quentin Road
Virginia Beach, VA 02217
Re: Roof Reconstruction
Dear Ms. Rosso,
On 5 April 2031, I hired your company, Ross Roofing, and Restoration, to repair my roof and install asphalt shingles on my property at 120 Field Road. Despite paying the full $3,000 fee upfront, the work done was substandard. The shingles have already begun to fall.
I am writing to inform you that my roof is currently in shambles. I am demanding that you refund my $3,000 in full and pay an additional $2,000 to repair the damage done during construction within 7 days of receiving this letter.
If I do not hear from you by 15 April 2031, I will file a lawsuit in small claims court.
Sincerely,
Felix Truffle
Final Thoughts
Some people argue that they did not act on your demand because they did not receive your demand letter. To avoid such problems, always send your letter via certified mail with a return receipt requested. The return receipt can act as evidence should your case end up in court.
