About Demand Letters

In civil cases, a lawsuit is generally preceded by a demand letter. Writing the letter is usually the first step an attorney will take if they've been retained in some civil dispute. While most situations are not resolved with a simple demand letter, they are an appropriate procedure for initiating a legal battle and are crafted in a manner to preserve as many possible options while making the strongest case.

Function

The purpose of a demand letter is to elicit some action from a potentially adversarial party. Situations that can lead to the sending of a demand letter are debt owed, canceled checks, an insurance claim or unpaid claim, or other specific actions that are required. Ideally, the function is to have the receiving party take action to remedy the situation.

Significance

The most significant part of a demand letter is its initiation of communication between the parties through notification of the demand, hopefully beginning arrangements for a settlement. The demand letter also provides instructions for how an effective settlement can be reached. The very wording of the letter should be firm so as to encourage a swift resolution. A good demand letter will also eventually become part of the written case record should the matter need intervention by a court.

Features

A demand letter has a few essential parts. Obviously, it states the claim, making the demand. But a good demand letter should also review the history of the dispute, creating a paper trail of established facts. It should have a detailed explanation of acceptable resolutions, giving the party an opportunity to settle without going to court. It must, of course, however, threaten litigation or other court action if satisfaction is not made according to the resolutions described, and it should be on an attorney's letterhead to be most credible. The very language of the letter should be polite but forceful.

Size

An effective demand letter rarely needs to be more than a page or two in length. In most cases it is simply designed to initiate communication between the parties or their counsels, who can then further negotiate on the phone or in person. If the specific terms of settlement are so complex that they cannot be explained in a one- or two-page letter, they should be summarized.

Effects

No one generally likes receiving a demand letter from an attorney, but several reactions are possible. One is that the letter is simply ignored, and if it is continually ignored after numerous attempts at contact, it may induce prejudice against the receiving party at court. A more likely response, however, is that the party receiving a demand letter will respond to dispute some or all of the demands and possibly also the history of the dispute. Resolving this situation is the work of a professional attorney and may or may not lead to action in court. Alternatively, an effective demand letter could simply lead to the receiving party effectuating settlement as demanded.

Resources

• Demand Letter Basics
• Sample Demand Letter