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.
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:
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.
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.
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:
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:
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 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.
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. 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.
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).