What are demand letters?

When two parties have a legal dispute, their first action is typically to discuss the matters between themselves. However, if no resolution can be made, their next step is to retain attorneys. These will spend time looking into the case and then issuing what are called, “demand letters.”

Demand letters are sent from one party’s attorney to the other party’s attorney. The letter outlines what the party that issued it requires in order to settle and avoid more legal action. Two examples of what the letter could demand include, demanding payment or demanding that the other party halt a specific activity.

If the parties cannot settle, they potentially face a costly and time-consuming litigation process. Therefore, they typically have motivation to settle and not go all the way to court. However, party’s who receive a demand letter don’t always agree to the terms. They sometimes respond with offering far less money than the demand letter requests or they counter with a demand letter of their own. Sometimes they may not do anything at all, in which case, they would need to prepare for litigation.

Most parties prefer to settle matters in this indirect way through demand letters rather than through litigation. At the informal stage, where demand letters are being sent there is more room for negotiation. If neither party is willing to negotiate and the case goes to court, then there is more risk involved. The parties risk facing a judge who will not decide in their favor.

Fortunately, even during a court case, either party can settle at any time prior to the judgment.

For more information about your specific case, call an experienced and knowledgeable attorney.