Legal Definitions - demand letter

A demand letter is a formal written communication, typically prepared by an attorney on behalf of a client, and sent to another party involved in a dispute. Its purpose is to clearly outline the nature of the disagreement, detail the harm or grievance suffered by the client, and specify the action the recipient must take (or stop taking) to resolve the issue.

The primary goal of a demand letter is to initiate negotiations and encourage an out-of-court settlement, thereby avoiding the need for a lawsuit. It often explains the potential legal risks, costs, and time commitment for the recipient if the matter proceeds to court, aiming to persuade them that resolving the dispute amicably is in their best interest. In some legal contexts, sending a demand letter is a required step before a lawsuit can even be filed.

Here are a few examples of how a demand letter might be used:

• Unpaid Services for a Small Business: Imagine a freelance graphic designer who completed a logo and branding package for a new startup company. Despite delivering the final files and sending multiple invoices, the startup has failed to pay the agreed-upon fee. The designer's attorney could send a demand letter to the startup. This letter would detail the services rendered, the agreed contract terms, the outstanding payment amount, and demand immediate payment within a specified timeframe. It would also inform the startup that failure to pay could result in a lawsuit to recover the debt, potentially including additional legal fees and interest.

  This illustrates a demand letter being used to seek payment for services rendered, outlining a breach of contract (non-payment) and demanding a specific action (payment) to resolve the dispute without court intervention.

• Property Damage from a Neighbor: Consider a homeowner whose backyard fence was severely damaged when their neighbor's large tree fell during a storm. The homeowner believes the tree was poorly maintained and posed a known risk, but the neighbor refuses to contribute to the repair costs. The homeowner's attorney might send a demand letter to the neighbor. This letter would describe the damage, provide evidence (photos, arborist report), state the estimated repair costs, and demand that the neighbor cover these expenses. It would also indicate that if the neighbor does not respond or agree to compensate, the homeowner may pursue legal action for property damage.

  Here, the demand letter addresses property damage caused by another party's alleged negligence, specifying the harm and demanding financial compensation to resolve the issue outside of court.

• Disputed Security Deposit Return: A tenant moves out of an apartment after their lease ends, having thoroughly cleaned the unit and left it in excellent condition. However, the landlord refuses to return the security deposit, claiming unsubstantiated damages and cleaning fees. The former tenant's attorney could send a demand letter to the landlord. This letter would reference the lease agreement, confirm the apartment's condition upon move-out, dispute the landlord's claims with evidence (move-out inspection report, photos), and demand the full return of the security deposit within a set period. It would also remind the landlord of state laws regarding security deposit returns and potential penalties for wrongful withholding, implying legal action if the deposit is not returned.

  This example demonstrates a demand letter used to enforce a contractual right (return of a security deposit), outlining the landlord's breach and demanding a specific action (return of funds) to prevent a legal claim.