How to Write a Formal Demand Letter

Tips and sample language for writing the most effective demand letter

By , Attorney · University of the Pacific McGeorge School of Law

No one wants to go to court if resolving an issue without litigation is possible. 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 settlement amount requested.

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 formally demand 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:

  • Your demand letter will catalyze settlement in many disputes.
  • 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 face the trouble of filing a small claims case. Even if you have unsuccessfully argued with your adversary in person or over the phone, laying out why you're owed money in a letter shows action.

Now, instead of just another cranky face on the other side of the counter, you and your dispute assume a sobering realness. The other party must accept 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 "claim" form, the paperwork similar to a "complaint" that initiates the case. You'll have to prove your case with evidence. When you write your demand letter, you'll establish your position and explain why you'll prevail.

One of the benefits of the process is that it will help you think through every aspect of your case, including the facts, law, and 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 it was meant to come with a jacket and is too skimpy to wear without it. Maya refuses to return the dress and hangs up the phone whenever she hears Sunita's voice. Sunita writes a demand letter outlining the interactions and sends it by certified mail but when Maya doesn't respond, Sunita files a small claims action. 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, serves as evidence backing up Sunita's version of the dispute, making 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," which is 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 those particular questions in the letter but rather compose it in a way that makes your opponent think about the issues. Here are other pointers to keep in mind:

  • Don't handwrite 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 minimal charge.
  • Include the facts. At first, it might seem 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 supporting their side, and your job is to ensure they remember everything that happened. Also, if you end up in court, a judge could read the letter, and you'll want the judge to understand what transpired. In essence, this is an expedited way to record the dispute and events afterward, including subsequent phone conversations, unanswered calls, and inappropriate conduct by the defendant.
  • Be polite. Don't personally attack your adversary, even if you believe it's deserved, because it invites the other side to respond similarly. Calm people are more believable because it demonstrates their confidence in their position, including when presenting an argument in court.
  • Explain your damages. You'll list the actual losses you suffered, such as the cost of medical visits, lost income, repair costs, and property damage.
  • When to ask for more than you want. You'll want to pad your opening demand whenever you are dealing with sophisticated negotiators and are asking for an amount over and above actual damages, such as pain and suffering, punitive damages, or "blue sky" in a business deal. For instance, if you want to settle for $20,000 total, you won't lead with that amount because you won't have room to negotiate. You'll ask for more. If you don't, your negotiations will likely stall. Why? Because attorneys and business people who negotiate regularly assume you left room to negotiate and expect you to move off your initial ask. Brush up on typical negotiation strategies, if necessary.
  • Set a deadline. One week can create urgency, but two weeks is usually best, especially when dealing with insurance representatives and others who don't have authority to settle the matter. Any longer and your opponent has less motivation to deal with you right away. Supply the actual date to remove any doubt and conclude by stating your intention to promptly pursue 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.
  • When to use certified mail. Many individuals and businesses use email almost exclusively, and it's okay to email all communications. However, if you don't receive a response, send the demand letter by certified mail, return receipt requested. If you end up in small claims court, you can use the return receipt to refute a claim that your opponent didn't receive the demand letter.

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 connect the fuel line to the fuel injector properly caused the fire. I enclose a copy of their invoice. Also, I was without 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 vehicle 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. After obtaining a money judgment, I will use all legal avenues to collect it. It also will be part of the public record available to credit agencies,

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. Per our written agreement dated May 17, 20xx, I paid you $4,175 to complete the job.

Problems with your work surfaced two weeks later when, on June 1, the tile in the north portion of the shower had sunk almost half an inch. Water pools in the corner because of the uneven shower floor, causing slow drainage.

When we spoke on the phone, I didn't appreciate the insinuation that I imagined the problem and that if the issue existed, it was minor.

Because I did not receive the competent remodeling job I paid for, and you refuse to remedy the problem, I must hire someone else to fix the shower, and I am demanding that you pay the costs.

I am enclosing a $1,200 estimate to level the shower floor from ABC Tile. Please remit $1,200 within ten days. If I don't receive the funds by June 15, 20xx, I will 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).