Litigation is expensive. As a result, it is often best to resolve a dispute between parties as soon as possible without racking up immense attorneys fees. The demand letter is often a great option for accomplishing this goal, and they can be sent by both attorneys and non-attorneys alike.
A demand letter is basically just a concise and clear letter demanding payment. Many businesses and individuals that owe money to another party know that they owe that money, but they just don't think the other party is going to do anything about it. A firm letter threatening lawsuit if payment is not received oftentimes induces these parties to settle the dispute sooner rather than later.
The first thing to do when writing a demand letter is to review and recite the facts underlying the dispute. It is not necessary to go into great detail, but the letter should include enough facts to give an outside observer enough information to understand what gave rise to the dispute.
The letter should specifically state what relief is requested and how the writer can be made whole. This may include a demand for a specific amount of money or the return of a specific piece of property.
Finally, threaten the alternative of filing a lawsuit. The other party should know that inaction on his or her part will lead to the sender seeking relief in court.
One common sense consideration to keep in mind is that the letter should look professional as possible. The more professional the letter looks, the more likely it is that the other party will know that the sender truly means business. Also, it is advisable to stay polite, even if the letter is firm in tone. This means avoid personally attacking the other party. This will make the other party more open to settling the dispute.
When we represent litigation clients, we like to start with a demand letter. If the dispute can be resolved quickly and without needing to go to court, our clients save both time and money, two of the most important goals when settling disputes.