Whether you are a business, individual, or any entity, demand letters are crucial tools used to procure a particular form of action. Under most circumstances, the request is for a form of payment. Thus, demand letters are not to be taken lightly. Use these tools below to effectively handle the situation.
- What is it?
A party sends a demand letter after they believe that another party wronged them. The letter will demand that you provide a written reply in a certain amount of time, or else the party will seek legal action. Boiled down to its core, it is a threat. And that threat is not to be taken lightly.
- Can you ignore the letter? Short answer: No.
Long answer: Still no. If you ignore a demand letter, you or your business can suffer serious repercussions. While you are not legally required to respond, if you do not, the party will have no choice but to take legal action. If legal action is taken, then you truly cannot ignore it. Furthermore, it will not look great when the opposing party argues to the court that they sent you a demand letter, offered you a reasonable amount of time to reply to it, and you failed to do so.
- Assess the letter
Upon receiving the letter, take the time to evaluate the arguments and demands cast upon you. Assure yourself that you are reading the letter with a clear head. Take your emotions out of it. Then assess the arguments that the party has made. Assess the factual background they are basing their claims off of. Assess the monetary claims as well as any demands to take action, e.g. the party is demanding that we remove our fence. Finally, assess any counterclaims (ie, claims against the party sending it) you may have.
In addition, you should take the deadline date of the letter into account. While the date has no real legal significance (ie, you cannot get in trouble with the law for failing to respond) the date is important for two reasons. First, the date represents the deadline that the party has requested you respond by. In other words, if you do not respond by
then or do not relay your intent to respond in the near future, the party may seek further action such as bringing the dispute into court. The other reason is more of an implication of the letter. Assume you receive a demand letter on May 1st. If the date that the letter requires a response by is May 10th, you can assume that the party is eager to move forward with the case. On the other hand, if the response date is closer to the end of May or even sometime in June, you can assume that the party is not as eager. Thus, they may be easier to work with or be more willing to come to a settlement, depending on their eagerness to get the case moving or not.
As a quick side note, you do have the possibility of ignoring the letter. This may be a way of impliedly replying to the demand letter. It essentially tells the other party that there is no credibility to their threat, not even enough to warrant a response. However, before you decide to ignore a demand letter, you should consult a lawyer to ensure that you have a strategy. Moreover, your lawyer will help you develop that strategy as well as aid you in understanding and combating the implications of that strategy.
- Determine whether or not you need an attorney
Most businesses and even individuals already have an attorney and thus you can utilize them for advice in approaching this demand letter. For those who do not have an attorney, you should consider one. If you decide to hire one, it may be best to pay a small one-time fee and in return have the attorney solely draft your response to the demand letter. While you can surely draft a strong letter, attorneys will input the necessary legal arguments and legal terms necessary to respond. If you decide that you want to find a lawyer, take a moment to read our post, “How to find a good lawyer”.
- Draft your letter
This section only applies to those that forego an attorney and decide to draft a response on their own. If you choose to draft a letter on your own, take these guidelines into consideration:
- Answer before the provided deadline, even if it’s to let the other party know that you intend to respond.
- Your response should be based on candid facts.
- Consider compelling language to communicate your arguments.
- Send it
Now that you have drafted it, send it over. In addition, send it via email or postal service so that you can acknowledge that the opposing party received it. This could be useful in a potential future legal proceeding.
Good luck! And always remember that your friends at JustLaw are a click away from aiding you in all your legal needs.