Demand Letters: What Are They and How Can They Help?
If you have found yourself in a pickle and are looking for a plan to get out of it, a demand letter is a simple and cost-effective means of communicating your desires.
What Is a Demand Letter?
A demand letter is intended for the person or company that wronged you. A good demand letter will lay out the important facts of your situation, analyze how the law applies, and demand specific action for them to right the wrong.
Why Write a Demand Letter?
A demand letter can have many purposes. The first is to attempt to keep your legal costs down. In most cases, a demand letter is drafted quickly because it is concise and to the point, with the general idea being the opposing party needs to perform the action you’re asking of them. The action required by your demand letter may be a refund, a repair, a demand to cease and desist, and everything in between. The letter will often cause the other side to negotiate and may even achieve your desired result immediately. In that situation, you have completely avoided the cost of litigation just by sending a letter. While that is not always the case, it is a win for you and your pocketbook. Keeping the case away from litigation is also more likely to preserve your relationship with the opposing party, making it a great tool in circumstances where you regularly work with someone, like a landlord or service provider.
It is important to remember that the opposing party will often have a different understanding of the facts, or even the law. In that situation, the other side responds and explains their contention or even their demands of you. This is helpful because you now know exactly where they are coming from and what to expect if you pursue litigation. Even if the other party does not agree with your demand letter, you now understand where the other side is coming from and are prepared to negotiate more effectively. This means your matter is more likely to result in a settlement.
A demand letter also puts the opposing party on notice of your potential legal claims. In some situations, you are legally required to give the other party a chance to right their wrong, or to give notice that you intend to file a lawsuit. Notice requirements are often overlooked and, if you do not comply, they can have an extremely negative impact on your lawsuit. A demand letter helps avoid this common mistake.
In addition, spelling out your causes of action for the opposing party creates leverage, particularly if a cause of action allows you to ask for increased damages or attorneys’ fees. Ideally, this would cause the other side to avoid the risk and meet your demands.
Demand letters come in all shapes and forms. I have used them to alert contractors of their projects’ missteps and request repairs, to ask a company to complete a project within a specific timeframe, and even to terminate relationships and contracts. Other clients only want to send a demand letter in hopes of achieving their desired end-result and will not pursue further litigation. As they say, where is the harm in asking?