Also known as solicitor letter or lawyer letter.
A demand letter is a formal notice demanding that the person to whom the letter is addressed perform an alleged legal obligation such as rectifying some identified problem, paying a sum of money or acting on a contractual commitment.
Most demand letters will include a deadline for action.
Demand letters are often used in business contexts because they are a courtesy attempt to maintain some goodwill between business parties and they often prompt payment, avoiding expensive litigation.
A demand letter often contains the "threat" that if it is not adhered to, the next communication between the parties will be through a court of law in the form of formal legal action (i.e. pleadings).
Although it is almost always a good initiative to send a demand letter before instituting legal proceedings, demand letters are not generally prerequisites for a legal action. But there are exceptions such as legal action on promissory notes or if the contract requires it.
A demand letter should include the phrase without prejudice to ensure that the contents of the letter are not later used against the sender.
Where libel or slander has occurred, it is good practice to demand an apology and a retraction before taking legal action.
An example of a demand letter would be in the situation of defamation. The plaintiff's lawyer would write to the alleged defaming person and demand a retraction and an apology.
Demand letters are powerful tools in a lawyer's arsenal.
An example of a demand letter follows:
July 16, 2012
The Egg Place
13 Market Place
We are writing to inform you that we are claiming the sum of $14 from The Egg Place. On our purchase of a carton of eggs from your commercial venue at the address noted above on July 15, 2012 for $14, we subsequently discovered that all 12 of the 12 eggs within the carton were broken.
This letter constitutes formal notice to pay us the sum of $14 within 10 days by cheque sent to our address as set out below, failing which, we reserve the right to take legal action against The Egg Place without further notice. Please act accordingly.
Bob and Sue Butterfingers
46 Cracked Lane
Litigation City, USA
See also without prejudice.
French, a mise en demeure.