A legal demand letter is a document used to demand the resolution of a dispute, especially one involving monetary debts. For example, a person or business may send one of these letters when repayment of a debt becomes significantly overdue and it appears that the person or company who owes the money has little-to-no intention of making payment. In such a case, the letter is used to state that money is due and includes the exact amount that is owed. It usually also includes a formal threat of court action if the matter is not resolved by a particular date. For example, a person who sends a legal demand letter may inform the debtor of his intention to sue him in small claims court if the debt is not repaid.
A legal demand letter should typically strike a polite but firm tone. It should normally be free of personal attacks or manipulations, even if the parties involved know each other very well. Since the resolution of the dispute is a business matter, the letter should resemble other business letters in tone. Some people may think heavy-handed tactics, accusations, and personal attacks are helpful in disputes, but they may actually make the recipient more resistant to complying. Instead, a business letter should politely let the recipient know that the dispute won’t simply go away and hopefully cause him to consider the risks of non-payment or non-compliance.
It’s general practice to include a history of the dispute in a legal demand letter. This basically sets the facts of the case out in writing. Providing these details to a party who already knows them may seem unnecessary. If the dispute makes it to court, however, having these details in the letter may be important. Additionally, including such information in the letter may help clear up any misunderstandings between the parties in the dispute.
While the other party in a dispute may already know what the opposing party wants, a legal demand letter normally requests a specific action. This is often the repayment of a sum of money, but could also be another type of action, such as a repair or completion of an agreed-upon project. It usually includes a type of threat of legal action as well. For example, the letter may state that the sender will initiate a lawsuit if the recipient doesn’t perform the action requested in the letter.