Aug 30 2017

How to Write a Formal Demand Letter #part #of #a #business #letter


How to Write a Formal Demand Letter

If your efforts to talk out your problems fail and you decide not to mediate, your next step is to send your adversary a letter. Many courts require you to make a formal demand for payment. But even where writing a formal demand letter isn’t legally required, there are two reasons why doing so makes great sense. First, in as many as one-third of all disputes, your demand letter will serve as a catalyst to settlement. Second, even if no settlement results, setting out your case in a formal letter affords you an excellent opportunity to lay your case before the judge in a carefully organized way. Or, put another way, it allows you to “manufacture” evidence that you will likely be permitted to use in court if your case isn’t settled.

EXAMPLE: Sunita purchases a designer dress on eBay from Maya. When it arrives, she realizes that the dress was meant to come with a jacket and is too skimpy to be worn without it. Maya refuses to take the dress back. She hangs up the phone whenever she hears Sunita’s voice on the line. Sunita writes a demand letter outlining all of this and sends it via certified mail. Maya doesn’t respond. In court, Maya feigns complete surprise, claiming, “I had no idea you had a problem with the dress why didn’t you say something before?” Sunita’s demand letter, with its complete account of events, can now be used as evidence to back up Sunita’s account of the dispute and it will make Maya look less believable on the whole.

One recurring theme with small claims cases: Many self-proclaimed winners never had to file their small claims case in the first place. Instead, these people wrote the other party a clear, concise letter demanding payment. As a result of either the letter itself or conversations it engendered, they received all, or at least a significant part, of what they asked for.

That a simple letter can be so effective may at first seem paradoxical, especially if you have already unsuccessfully argued with your adversary in person or over the phone. To understand why the written word can be so much more effective, think about the times you have found yourself embroiled in a heated consumer dispute. After angry words were exchanged maybe even including your threat of a lawsuit what happened next? The answer is often “nothing.” For any number of reasons, you didn’t follow up on your “I’ll sue you” threat. And, of course, you aren’t the only one who hasn’t made good on a declaration of intent to file a lawsuit. In fact, so many people who verbally threaten to sue don’t actually do it that many potential defendants don’t take such threats seriously.

But things often change if you write a letter, laying out the reasons why the other party owes you money and stating that if you fail to get satisfaction, you plan to go to small claims court. Now, instead of being just another cranky face on the other side of the counter or a voice on the phone, you and your dispute assume a sobering realness.

Really for the first time, the other party must confront the likelihood that you won’t simply go away, but plan to have your day in court. And that person will think about the time and energy it will take to defend a case and that you may win. In short, assuming your position has at least some merit, the chances that the other party will be willing to pay at least a portion of what you ask go way up when you make your case in writing.

You can be sued without first being sent a formal letter stating that a lawsuit is imminent. Some people believe they can’t be sued until they receive a formal letter asking for payment and saying that a lawsuit will be filed if it isn’t forthcoming. This is not necessarily true. A simple past-due notice form from a creditor, stating that if the account isn’t paid promptly court action will be pursued, is usually sufficient. In addition, a judge has the power to conclude that an oral demand for payment is adequate.

Composing Your Demand Letter

When writing your demand letter, here are some pointers to keep in mind:

Type your letter. If you don’t have a computer or typewriter, try to get access to one. Many public libraries have computers that you can use for free or a minimal charge.

Concisely review the main facts of the dispute. At first it may seem a bit odd to outline these details; after all, your opponent knows the story. But remember if you end up in court, the letter will be read by a judge, and you want the judge to understand what happened. Now is a good chance to make a record not only of the initial dispute, but of any subsequent phone conversations, unanswered calls, or inappropriate conduct by the defendant.

Be polite. Absolutely avoid personally attacking your adversary (even one who deserves it). The more you attack, the more you invite the other side to respond in a similarly angry vein.

Write with your goal in mind. The letter should encourage your opponent to make a businesslike analysis of the dispute and raise such questions as:

  • What are my risks of losing?
  • How much time will a defense take?
  • Do I want the dispute to be decided in public?

Ask for exactly what you want. For example, if you want $2,000, don’t beat around the bush ask for it (or possibly a little more to allow some negotiating room). Explain how you arrived at this figure. And be sure to set a deadline. One week (two weeks at the outside) is usually best; anything longer and your opponent has less motivation to deal with you right away. Supply the actual date, to remove any doubt.

Conclude by stating you will promptly pursue your legal remedies if your demand is not met. Remind the defendant that a court judgment could adversely affect his or her credit rating.

Make and keep copies. Make a copy of each letter before you send it, and keep a copy of the post office receipts (use certified mail, return receipt requested). Keep all correspondence from your adversary, also.

Use certified mail. Send the demand letter via certified mail with a return receipt requested. If you do end up in small claims court, you can use the return receipt to counter any claim that your opponent didn’t receive the demand letter.

Sample Demand Letters

Below are letters a consumer might write to an auto repair shop after being victimized by a shoddy repair job and to a contractor who botched a remodeling contract.

Sample Letter: Car Repair

Tucker’s Fix-It-Quick Garage
9938 Main Street
Houston, TX

On May 21, 20xx, I took my car to your garage for servicing. Shortly after picking it up the next day, the engine caught fire because of your failure to properly connect the fuel line to the fuel injector. Fortunately, I was able to douse the fire without injury. As a direct result of the engine fire, I paid the ABC garage $1,281 for necessary repair work. I enclose a copy of their invoice. In addition, I was without the use of my car for three days and had to rent a car to get to work. I enclose a copy of an invoice showing the rental cost of $145. In a recent phone conversation, you claimed that the fire wasn’t the result of your negligence and would have happened anyway. And you said that even if it was your fault, I should have brought my car back to your garage so you could have fixed it at a lower cost.

As to the first issue, Peter Klein of the ABC Garage is prepared to testify in court that the fire occurred because the fuel line was not properly connected to the fuel injector, the exact part of the car you were working on. Second, I had no obligation to return the car to you for further repair. I had the damage you caused repaired at a commercially reasonable price and am prepared to prove this by presenting several higher estimates by other garages.

Please send me a check or money order for $1,426 on or before July 15. If I don’t receive payment by that date, I’ll promptly file this case in small claims court. And assuming I receive a judgment, which will be part of the public record available to credit agencies, I will promptly follow all legal avenues to collect it. You may reach me during the day at 555-555-2857 or in the evenings until 10 p.m. at 555-555-8967.

Sample Letter: Home Contractor

Talk to a Litigation attorney.

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