Understanding a Demand Letter
What is a demand letter?
When legal disputes arise, the first step toward resolution often begins with a demand letter. A demand letter is a formal written communication, typically prepared by a licensed attorney on behalf of a client, that clearly states the nature of a dispute and requests a specific action or remedy from the opposing party—such as payment, compliance, or cessation of certain behavior.
This article will help you understand what a demand letter is, why it’s an important tool in legal and business matters, what it should include, and how it can set the stage for negotiation or further legal action. Whether you’re on the sending or receiving end, knowing how demand letters work can make a big difference in how you handle conflict.
What kind of disputes can we send a demand letter for?
Demand letters can be sent out for several civil disputes. Some of these disputes include debt collections, breach of contract issues, cease and desist orders, etc.
Why do we need to send a demand letter?
The demand letter is typically the first step in the litigation process. There are two reasons why we begin the litigation process with a demand letter:
1.The letter puts the opposing party on notice that we intend to file a lawsuit, giving them a chance to resolve the issue before. This notice provides an opportunity for both parties to save a substantial amount of time and money by avoiding litigation.
2. Under the Civil Practice and Remedies Code, the demand letter reserves the client an opportunity to recoup attorney fees. The Code states that if the client gives notice of a lawsuit and the opposing party fails to resolve the claim prior to filing the lawsuit, then the client can request attorney fees from the opposing party.
What does a demand letter say?
The contents of a demand letter can vary depending on the legal issue at hand. Typically, we consult with the client on an end goal or desired outcome, then we list out those terms within the demand letter. We provide the opposing party with a deadline to meet these terms or respond to the demand letter.
How does it work? What are the next steps?
Demand letter results can vary from full compliance to the client’s terms, an amicable settlement agreement, or even filing a lawsuit against the opposing party.
If a response to the demand letter from the opposing party is not received by the end of the deadline period, or if a response is received but the opposing party is not willing to resolve the claim(s), then we move on to filing a lawsuit.
To file a lawsuit, we draft a petition and file it with the state court against the opposing party. Once the lawsuit is filed, the opposing party will have the opportunity to respond with an Answer or a Motion to Dismiss.
