How to Write a Formal Demand Letter

Tips and sample language for writing the most effective demand letter

Updated By , Attorney

No one wants to go to court if it's possible to resolve an issue without litigation. That's why for most disputes the negotiation process starts by sending a demand letter. The demand letter opens a discussion between you and your opponent by explaining:

  • your side of the story
  • the amount you've incurred in bills, and
  • the total amount in settlement you're requesting.

After you send your demand letter, if your efforts to resolve the dispute fail and you decide not to mediate, filing a complaint in small claims court can resolve the matter.

Demand Letter Benefits

Many courts require you to make a formal demand for payment before filing your lawsuit. But even if writing a formal demand letter isn't legally necessary, there are two reasons why sending one makes sense:

  • In as many as one-third of all disputes, your demand letter will catalyze settlement.
  • Even if you don't settle the case, explaining your position in a formal letter affords you an excellent opportunity to organize the matter.

Learn more about preparing evidence for your small claims court case.

Promotes Case Settlement

One benefit of a clear, concise letter demanding payment is that you might not have to go through the trouble of filing a small claims case. Even if you have already unsuccessfully argued with your adversary in person or over the phone, laying out the reasons you're owed money in a letter shows action. Now, instead of being just another cranky face on the other side of the counter, you and your dispute assume a sobering realness. The other party must face the fact that you won't simply go away. And if you sue, it will take time and energy to defend a case. Even worse, you might win. In short, your chances of getting paid will increase when you make your case in writing.

Helps You Organize Your Case

There's more to a small claims court case than filling out the complaint (the paperwork that initiates the case). You'll have to prove your case with evidence. When you write your demand letter, you'll set forth your position, and provide the reasons you'll prevail. Doing so will help you think through every aspect of your case, including the facts, law, and the evidence you'll need to prove your position. You'll be better prepared to litigate if the need arises.

Example. Sunita purchases a designer dress on eBay from Maya. When it arrives, she realizes that it was meant to come with a jacket and is too skimpy to be worn without it. Maya refuses to take the dress back. She hangs up the phone whenever she hears Sunita's voice on the line. Sunita writes a demand letter outlining all of this and sends it via certified mail. Maya doesn't respond. In court, Maya feigns complete surprise, claiming, "I had no idea you had a problem with the dress–why didn't you say something before?" Sunita's demand letter, with its complete account of events, can now be used as evidence to back up Sunita's version of the dispute–and it will make Maya look less believable.

Find out about the types of small claims cases you can file.

Preparing Your Demand Letter

When writing your demand letter, keep your goal in mind. You're encouraging your opponent to assess the situation in a business-like way. Ultimately, you'll want the letter to raise the following types of questions in the mind of the defendant (the person or business you're suing):

  • How much time will a defense take?
  • Do I want this dispute resolved in public?
  • Will I lose?
  • How much will it cost me if I lose?
  • Can I settle this now for less money?

Remember that you won't write out those particular questions. You'll write the letter in a way that makes your opponent think about these issues. Here are other pointers to keep in mind:

  • Type your letter. If you don't have a computer, try to get access to one. Many public libraries have computers you can use for free or for a minimal charge.
  • Include the facts. At first, it might seem a bit odd to outline these details; after all, your opponent knows the story. But it isn't always the case. Many people remember only the facts that support their side. You'll want to be sure that they remember all of the facts. Also, if you end up in court, the letter could be read by a judge, and you'll want the judge to understand what happened. In essence, this is an expedited way to make a record of not only of the initial dispute, but of any subsequent phone conversations, unanswered calls, or inappropriate conduct by the defendant.
  • Be polite. Don't personally attack your adversary (even one who deserves it). The more you attack, the more you invite the other side to respond in a similarly angry vein. And, calm people tend to be more believable because it demonstrates that they're confident in their position. This holds when you're presenting an argument in court, too.
  • Ask for what you want. If you want $2,000, don't beat around the bush–ask for it. Keep in mind that it's common to ask for a bit more so that you have room to negotiate. A sophisticated opponent will assume that you did just that. Explain how you arrived at this figure by setting forth any actual losses you suffered, such as the cost of medical visits, lost income, repair costs, and property damage.
  • Set a deadline. One week (two weeks at the outside) is usually best; anything longer and your opponent has less motivation to deal with you right away. Supply the actual date to remove any doubt. Conclude by stating you will promptly pursue your legal remedies if the recipient fails to pay your demand.
  • Make and keep copies. Make a copy of each letter before you send it, and keep a copy of the post office receipts (use certified mail, return receipt requested). Keep all correspondence from your adversary, also. If you send it by email, be sure not to delete it and keep copies of all replies.
  • Use certified mail. Send the demand letter via certified mail with a return receipt requested. If you do end up in small claims court, you can use the return receipt to counter any claim that your opponent didn't receive the demand letter. Again, many individuals and businesses use email almost exclusively now and it's fine to email all communication as long as you receive a response. If you don't, be sure to send the letter by certified mail.

Sample Demand Letters

Below are letters a consumer might write to an auto repair shop after being victimized by a shoddy repair job and to a contractor who ruined a remodeling project.

Car Repair Letter

June 16, 20xx

Tucker's Fix-It-Quick Garage
9938 Main Street
Houston, TX

Dear Mr. Tucker,

On May 21, 20xx, I took my car to your garage for servicing. Shortly after picking it up the next day, the engine caught fire. Fortunately, I was able to douse the fire without injury.

As a direct result of the engine fire, I paid the ABC garage $1,281 for necessary repair work. ABC garage indicated that your failure to properly connect the fuel line to the fuel injector caused the fire. I enclose a copy of their invoice. Also, I was without the use of my car for three days and had to rent a car to get to work. I enclose a copy of an invoice showing the rental cost of $145.

In a recent phone conversation, you claimed that the fire wasn't the result of your negligence and would have happened anyway. And you said that even if it was your fault, I should have brought my car back to your garage so you could have fixed it at a lower cost.

As to the first issue, Peter Klein of the ABC Garage is prepared to testify in court that the fire occurred because the fuel line wasn't correctly connected to the fuel injector, the exact part of the car you were working on. Second, I had no obligation to return the car to you for further repair. I had the damage you caused repaired at a commercially reasonable price and am prepared to prove this by presenting several higher estimates by other garages.

Please send me a check or money order for $1,426 on or before July 15. If I don't receive payment by that date, I'll promptly file this case in small claims court. And assuming I win and obtain a money judgment, which will be part of the public record available to credit agencies, I will promptly follow all legal avenues to collect it. You can reach me during the day at 555-555-2857 or in the evenings until 10 p.m. at 555-555-8967.

Sincerely,

Marsha Rizzoli

Home Contractor Letter

June 20, 20xx

Beyond Repair Construction
10 Delaney Avenue
Seattle, WA

Dear Sirs:

You recently did replacement tile work as a part of a remodeling project on my downstairs bathroom at 142 West Pine Street. On May 17, 20xx, I paid you $4,175 for completion of the job per our written agreement. Problems with your work surfaced two weeks later.

Specifically, on June 1, I noticed that the tile in the north portion of the shower had sunk almost half an inch, with the result that our shower floor was uneven and water pooled in the downhill corner before eventually going down the drain.

In our telephone conversations, you claimed that the problem was in my imagination, was my fault, and was minor. This response is unacceptable. I did not receive the competent remodeling job that I paid for and must hire someone else to fix the problem.

Please forward $1,200 (the cost of redoing the work per the enclosed estimate from ABC Tile) within ten days or to arrange to repair the work yourself. If I don't hear from you by June 15, 20xx I will promptly file a lawsuit in small claims court.

Sincerely,

Ben Price

Additional Help

If your demand letter doesn't work, find out when you should sue in small claims court. For more help preparing a small claims case, see Everybody's Guide to Small Claims Court, by attorney Cara O'Neill (Nolo).