A demand letter, letter of demand,
(of payment), letter before action, or letter before claim, is a letter stating a legal claim (usually drafted by a
lawyer
A lawyer is a person who is qualified to offer advice about the law, draft legal documents, or represent individuals in legal matters.
The exact nature of a lawyer's work varies depending on the legal jurisdiction and the legal system, as w ...
) which makes a demand for
restitution
Restitution and unjust enrichment is the field of law relating to gains-based recovery. In contrast with damages (the law of compensation), restitution is a claim or remedy requiring a defendant to give up benefits wrongfully obtained. Liability ...
or performance of some obligation, owing to the recipients' alleged
breach of contract
Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other part ...
, or for a
legal wrong
A wrong or wrength (from Old English – 'crooked') is an act that is illegal or immoral. Legal wrongs are usually quite clearly defined in the law of a state or jurisdiction. They can be divided into civil wrongs and crimes (or ''criminal offe ...
. Although demand letters are not legally required they are frequently used, especially in
contract
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...
law,
tort
A tort is a civil wrong, other than breach of contract, that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with cri ...
law, and
commercial
Commercial may refer to:
* (adjective for) commerce, a system of voluntary exchange of products and services
** (adjective for) trade, the trading of something of economic value such as goods, services, information or money
* a dose of advertising ...
law cases. In some cases, evidence of attempts to settle are required before a court case will be accepted by the court, and demand letters are commonly used to fulfill this requirement. For example, if one anticipates a breach, it is advantageous to send a demand letter asserting that the other side appears to be in breach and requesting assurances of performances. Demand letters that are not responded to may constitute admissions by silence. Also, a demand letter will often generate a denial letter stating the basis for rejecting claim (such as when the incorrect entity is sued), and is sometimes a good indication of what defenses will be raised if a suit is brought later.
Demand letters are sometimes used as a form of harassment and/or intimidation.
Insurance claims
In personal injury claims, the settlement negotiation process begins by the victim submitting a demand letter to the insurance companies. The purpose of the demand letter is to present facts about the accident in order to persuade the insurance companies to provide adequate compensation. A typical demand letter is structured in the following manner:
* Description of the Accident
* Discussion of Accident Liability
* Description of Personal injuries
* Description of Medical treatments
* List of Medical Bills/Lost Income Statements
* Injury Settlement Demand
The personal injury demand letter is then sent to the insurance companies with supplemental documents that are referenced in the letter. This may include copies of accident reports, photographs of the accident/injuries, medical bills, doctor's statements etc.
The insurance company will then analyze the arguments made in the demand letter and respond with a counter settlement offer.
Debt collection
In the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, demand letters from a
debt collector relating to a consumer debt must comply with the
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA), Pub. L. 95-109; 91 Stat. 874, codified as –1692p, approved on September 20, 1977 (and as subsequently amended), is a consumer protection amendment, establishing legal protection from abusive d ...
.
In certain types of legal proceedings in
Quebec
Quebec is Canada's List of Canadian provinces and territories by area, largest province by area. Located in Central Canada, the province shares borders with the provinces of Ontario to the west, Newfoundland and Labrador to the northeast, ...
, a demand letter is mandatory; without it, a person could lose their case.
See also
*
Legal threat
*
Cease and desist
A cease and desist letter is a document sent by one party, often a business, to warn another party that they believe the other party is committing an unlawful act, such as copyright infringement, and that they will take legal action if the oth ...
References
{{DEFAULTSORT:Demand Letter
Legal documents
Letters (message)