What is a Demand Letter?

Personal Injury • September 15, 2021

If someone owes you money, whether it’s because of a breach of contract or for services you’ve performed, it’s reasonable to expect to get paid. Additionally, if you’ve paid someone to do work for you and they don’t do it, you need to find a way to rectify that. It’s incredibly frustrating to have to chase someone in order to get them to do what was already agreed upon. If you find yourself in this position, you should consider contacting a Jersey City injury attorney who can help you collect this money. One of the methods they might use to secure the payment is to send a demand letter.

What is a Demand Letter?

A demand letter is sent to an individual, a business, or any other entity as a way to try to resolve a dispute, typically over legitimate payments that are owed or work that wasn’t completed. The goal of a demand letter is to obtain the money or work that is owed to you without having to go through the trouble of taking legal action. Legal action is almost always time-consuming, expensive, and stressful. If it’s possible to take care of the situation without filing a lawsuit, that’s generally preferable because it is much less costly.

When Would You Send a Demand Letter?

There are several reasons that you might need to send someone a demand letter. Some of the most common situations include the following:

Breach of Contract

If you made an agreement with someone to do work for you and they fail to complete the work, it might be necessary to send a demand letter. For example, you hire someone to build a bathroom in your house and pay them for it. After a few weeks, they stop showing up and leave the work half finished. Here, a demand letter could be sent in an attempt to try to work out a solution to the problem before you have to take further legal action.

You’re Owed Money

If someone owes you money and refuses to pay you, this is a situation where a demand letter might be a good first step. If you have a lawyer draft and send the letter, the party who owes you money will see that you’re serious. Hopefully, they will understand that if they don’t pay, you will sue them. Instead of making both parties immediately go through an expensive lawsuit, a demand letter may convince them to pay what they owe you so they can avoid a more complicated situation.

Insurance Claims

If you were injured in a car accident or got seriously hurt in some other type of incident that was someone else’s fault, you may end up needing to send a demand letter. These letters are quite common in personal injury cases. A letter is usually sent to the insurance company of the at-fault party, outlining the facts of the cases and the total damages that the plaintiff suffered. The letter then demands that they make an appropriate settlement offer. Sometimes this resolves the case without it having to go to trial. 

After You Send It

After you send the demand letter, one of several things can happen. The party you sent it to agrees to pay you. This is the best-case scenario. In some cases, the other party will respond to your demand letter with a counteroffer. Finally, your demand letter might just be refused or ignored. In this case, you will need to decide if it’s worthwhile to move forward with a lawsuit.