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:
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.
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:
Learn more about preparing evidence for your small claims court case.
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.
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.
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):
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:
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.
June 16, 20xx
Tucker's Fix-It-Quick Garage
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.
June 20, 20xx
Beyond Repair Construction
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.
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).