How to Write a Demand Letter to a Contractor Who Was Overpaid

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Sending a demand letter can help you recover money paid to a contractor in error.
Sending a demand letter can help you recover money paid to a contractor in error. (Image: Digital Vision./Photodisc/Getty Images)

If you have accidentally overpaid a contractor for work on your behalf, you may be able to request a return of the extra money simply by sending a demand letter. Be cordial and professional in your letter. Remember: You have no reason to assume the contractor is acting in bad faith. Honest errors often occur in calculations, especially with tracking progress payments and contract prices.

Basic Information

Reference the property, contract number or customer ID, if any of these apply to your situation. Enclose all of the documentation you have to back up your claim, such as check stubs, a copy of the contract and any change orders modifying the total amount due under the contract. Begin your letter with a brief summary of the contract terms, including key dates and the agreed-upon compensation for the project. List the payments made and the difference between the contracted pay and the amount that was actually paid to the contractor.

Call to Action

Finish the letter with a call to action asking the contractor to repay the excess by a specific date. If the overpayment is large and you are working with a small business, you may want to offer the contractor a payment schedule. This increases the chances of you receiving at least part of the overpayment, even if the contractor cannot afford to repay the entire amount at once.

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