A demand letter is often considered the “beginning” of a lawsuit. Specific wording in a demand letter can better help a plaintiff with their case. It can have a tremendous legal benefit, but not many people know what it is.
A demand letter is a legal document that states what the legal complaint of a party is. Essentially, it includes statements of what the other party (the defendant) did that gives rise to the cause of action, and the damages the plaintiff is requesting from the defendant. Damages refer to the monetary amount the plaintiff suffered, and is now asking for. Oftentimes, a plaintiff may even ask for an injunction, or an order to ask defendant to stop engaging in a certain type of behavior.
A demand letter basically “demands” the return of personal property or money from the defendant and also concludes by stating that the plaintiff will sue defendant in court if they do not comply with the document. If defendant responds and complies with the demand letter, then the plaintiff will not need to go to small claims court and bring that claim against defendant. For more information on how to file a personal injury claim, please visit our page here.
A demand letter is most commonly used when dealing with small claims cases. A small claims case is one where the plaintiff is not seeking a substantially high sum of monetary damages from the other party. Each state determines what a small claims case is in their own way. In the state of California, a small claims cases deal with $10,000 or less in damages.
Many states, including California and Nevada make it mandatory that a demand letter be sent to the other party (defendant) before litigating it in court in front of a jury trial. It is important to get tracking information if sending the demand letter by mail because the court may ask for it prior to bringing in the claim.
Cases Where a Demand Letter is Necessary
A demand letter is almost always useful in different types of cases. But demand letters are more common in certain cases, including:
- When one party owes another party money. This could include any contractor cases, employer/employee situations, or any purchase agreements made between parties. In the demand letter, one party will be claiming that the other owed them money.
- When an insurance company declines any payout to the insured. This is the most common type of scenario, and demand letters are usually the first step taken prior to any negotiations.
- When one party stops performing for another party. These types of cases include work for hire situations, when the employee stops working halfway through the job.
Tips On Handling Demand Letters
Our attorneys at Heidari Law have drafted a couple of tips when dealing with a demand letter. Because demand letters have multiple steps, it is important to constantly stay on track.
- There are various reasons as to why a party may send a demand letter. Sometimes, parties send it maliciously. Other times, parties send it to avoid a trial altogether, and really make a good faith effort to negotiate prior to taking the claim to court. Be prepared for malicious demand letters, along with any legal threats made in the letter.
- If you receive a demand letter from another party, the worst thing you can do is ignore it. The more time that passes by, the worse it looks for you. The court also usually looks down upon parties who have rejected responding to demand letters. As a result, if the case were to go to trial, the court could possibly rule for the plaintiff’s side. There is no legal rule that makes it mandatory to respond, but courts usually look down upon it. Not responding automatically gives the plaintiff the opportunity to bring the claim to court.
- When responding to a demand letter, refrain from using any inappropriate language. Always address the plaintiff respectfully, despite the fact that you are angered. The courts also look down upon inappropriate or vulgar language in replies to demand letters. You want to keep the upmost respect to the other party and to the court at all times.
- If you and plaintiff come to an agreement as a result of the demand letter, make sure both parties give written consent, and sign and document it. This prevents any party from falsely making the accusation that the demand letter was never settled.
- After reading a demand letter, determine the merits of the plaintiff’s claim. Look back at records and checks. Make written notations to yourself if you notice that plaintiff has made false accusations.
- If you notice complex issues in the letter, and plaintiff is making several untrue statements, contact an experienced demand letter attorney immediately. Having an attorney look at your demand letter response could build up your credibility, and give you a higher confident ground to respond to plaintiff’s accusations.
- If obtaining an attorney, make sure the attorney is aware of any facts pertaining to the relationship, even if not stated in the demand letter. In order to draft an effective response, the attorney must be made aware of the entire situation.
How to Send a Demand Letter
No state has specific rules in place as to how a demand letter should be sent. But each state does advise certain steps the sending party can take to prevent any problems or miscommunication in the future. For example, California advises that if sending the demand letter by mail, the sender should purchase insurance and a return receipt. In that case, the receiving party will have to sign the receipt, indicating their receipt. California also advises that the letter be sent to a permanent home address, rather than any temporary housing or place of business.
What Happens After You Send the Demand Letter?
- Defendant could respond with another letter denying any allegations. If this happens, then both parties must go to small claims court.
- Defendant could also respond by asserting some type of counterclaim where they are stating that plaintiff is the one that actually violated laws instead of them, and defendant is entitled to money damages instead.
- Defendant could respond admitting liability and how they are to pay back plaintiff. Defendant could also mention any settlement amounts to prevent going to court.
- If defendant does not respond, then both parties will have to go to court and plaintiff will have the opportunity to explain that defendant never responded to the demand.
In California, there is a time limit on when demand letters should be settled. If 9 months have passed since the original letter was sent to the defendant, both parties have to bring their claims to court for failing to agree. If you receive a demand letter, it is advised to seek advice from an attorney immediately. Failing to respond to a demand letter could end up with serious consequences in court.
A demand letter can seem a bit confusing, and sometimes could make or break your case. A successful demand letter could prevent going to litigation and end up settling with large amount with the defendant. It is crucial to seek advice of an attorney if you are not well versed in the law. For more information on what to include in a demand letter, please visit our page here.
Our team of litigation attorneys at Heidari Law Group have offices in major cities throughout California and Nevada. Offices include Los Angeles, Las Vegas, Sacramento, and Irvine. Because a demand letter has specific requirements, it is important to seek the assistance of an experienced attorney to make sure it is written properly. One small mistake can potentially cause an entire lawsuit to be lost. Our attorneys will work to make sure you have an effective demand letter, and seek justice you deserve.
Each demand letter must be written with a specific legal strategy in mind. We work with our clients diligently to understand their concerns and draft an effective demand letter. Our attorneys are experienced in several types of personal injury lawsuits and workplace discrimination. If you or a loved one have suffered injuries and believe you have a legal case, contact our Irvine attorneys for a free consultation today.
***Disclaimer: This page is created by Heidari Law Group for educational purposes. This article provides a general understanding of the law. It does not provide specific advice. By using this site and reading through this page, there is no attorney-client relationship created between you and any member of Heidari Law. Further, due to the constant change of the law, some parts of the information above may no longer be good law.