Legal: The Elements of an Effective Demand Letter
Most disputes begin their “legal” phase upon the issuance of a demand letter, whether written by yourself or an attorney. An effective demand letter can often bring about a quick resolution and offers the recipient an opportunity to curtail potentially lengthy litigation. Likewise, it is an opportunity for the writer of the demand to make a position known and to seek a resolution, also short of an actual lawsuit.
However, not all demand letters are created the same, and I’ve seen many demand letters written by individuals and attorneys alike that read more like a threat than a demand. Some demand letters are written so poorly that it is unclear what the specific issue is or what the intended solution is that is being requested in this letter. Thus, based on my experience, I believe an effective demand letter should (and should not) include the following:
The tone of a demand letter is vital and should be considered before you even begin. The goal of a demand letter is to notify another of a problem and provide a proposed solution. The goal is not, nor should the letter read as being a threat of any kind. Therefore, the tone should remain professional and not confrontational. Whether you are writing this letter to a neighbor or to a multinational corporation, I find that civility and a calm tone is often much more likely to reach a desired conclusion.
Likewise, there are a myriad of laws out there (both state and federal) that place limitations on those making demands. If you include threats of violence, jail, or other bad acts if the recipient does not do what you want them to, you could be in danger of a criminal investigation or a civil lawsuit against you.
Therefore, keep the tone non-threatening, professional and be specific with your intention of seeking a resolution (as opposed to retaliation). State precisely what the relevant facts are and express what your resolution entails.
Few things are more frustrating than when you read a demand letter that certainly makes a demand, but gives no basis in fact for what the demand is really for. I see this frequently with demand letters, in which a demand letter will have multiple pages that paint my client in a negative light, citing all kinds of scary sounding laws, and making all kinds of statements about what could happen if the matter went to court; however, they provide absolutely no details about the facts that the claim is based on.
Before you can consider the merits of any demand, you need to be able to see some factual background about what the demand is based upon. That does not mean you need to write a novel or give up every detail about what happened. However, a succinct set of facts (that can be supported with emails/letters/contracts, etc.) goes a long way in helping one to determine if there is merit to the demand letter.
I find some people are resistant to the fact of putting forth their evidence in demand letters for fear it gives an advantage to the other side in responding. While every case is different, I find it a better practice to put forth evidence early (at least a good sampling of it). If you refer to evidence you are not sharing, then I put zero merit in the statement.
Legal Requirements and Deadlines
Several laws have specific amounts of time that you must give the responding party to provide a response to your demand. For example, many consumers rely on the Texas Deceptive Trade Practices Act (known as the DTPA) for defective products and/or misleading advertising. A demand under the DTPA requires you give a respondent 60 days to consider the demand before responding. There are about as many deadlines as there are statutes, so it’s a good idea to consult an attorney or do some solid research yourself to make sure that your case is not defective from the beginning due to a deadline technicality.
Further, be very specific about when a response is to be received and how you want the response. For example, saying “I expect a timely response” is frequently not an effective way to obtain a reply. Instead, one might say “If no written response is received by April 30, 2023 at 5:00 p.m. then I shall assume you have no disagreement with the content of my demand but are unwilling to respond to it timely.” This type of response gives a definitive deadline and puts a burden of responding on the receiving party by having them believe they have admitted fault if they fail to respond. If payment is demanded, be clear about the exact amount to be paid, how the payment is to be made (including where to send payment, and form of payment – such as a cashier’s check).
As stated earlier, I must emphasize to never threaten anyone with any type of physical or mental harm or other illegal activity. However, you should state clearly what you intend to do if the demand is not resolved. For example, “if you do not pay $x.xx within 60 days, I will have no choice but to file a lawsuit.” Stating the consequence allows the receiving party to weigh the pluses and minuses of resolving the matter sooner rather than later.
The initial demand letter is the first opportunity to resolve the matter in the most timely and cost efficient manner. In fact, many disputes are settled with a demand letter (while some may include a few follow up phone calls, as well). In order to ensure that the recipient does not contend later that they “never received” the demand, I do suggest sending multiple versions – regular mail, certified mail, email, etc.
If you receive a response to your demand, be open-minded with the possible proposal in their response. You should take some time to carefully consider their response in the same manner as you would want the recipient of the demand to consider what you sent. In other words, consider their facts and evidence (if any) and any offer that may be made.
Finally, as I heard often in law school, remember that your demand letter may be Exhibit No. 1 at any trial over the matter, so the more cool, calm and collected your demand letter is, the more apt your case will be successful if it has to go to the next level (possible litigation). You do not want a threat laced, poorly written letter to be the first thing a jury or judge considers when deciding your case. Keep it professional, direct, and reasonable – it will not only serve you in the short term by encouraging a resolution quickly, it will likely serve you in the long term by showing your well-reasoned, professional stance in obtaining a reasonable resolution that you are satisfied with.