BUSINESS INFORMATION
Writing a letter of demand
You can draft a letter of demand on your own to request payment for money owed to you, without needing to involve a lawyer.
Sending a letter of demand is a crucial formal step in recovering debts.
review your contract or agreement with the individual or company that owes you money. Ensure the letter is addressed to the correct party and aligns with the agreed terms and conditions. Additionally, consider seeking legal advice before proceeding, depending on the complexity of the situation.
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Benefits of Sending a Letter of Demand
- Clearly communicates the payment demand to the debtor.
- Offers the debtor a final opportunity to settle the debt before escalating the matter.
- Helps preserve goodwill and a positive business relationship, potentially avoiding costly and adversarial legal actions.
- Serves as written evidence if further action is required (send it via registered post or courier to confirm delivery).
FREE DOWNLOAD
Letter of demand template
Download our template to use as a guide when writing your own a letter of demand.
Key Elements to Include in a Letter of Demand
If you choose to write your own letter of demand, ensure it:
- Clearly outlines the issue and the amount owed.
- Firmly requests payment within a specified timeframe (clearly stated in the letter).
- Specifies your preferred payment method.
- Includes copies of previous payment requests and supporting documents that validate your claim.
- Retains a copy of the letter and all accompanying documents for your records.
Additional Tips
- Attach relevant contracts, agreements, invoices, or other evidence proving the goods or services were provided as agreed. Note that a letter of demand is only applicable for debts related to goods or services; it cannot be used for claims involving loss or damage.
- Avoid making the letter appear as a legal document or implying that legal action has already been initiated.
- Clearly state the payment deadline, typically allowing at least 14 days for the debtor to respond.
- If the debt remains unpaid after the deadline, seek further assistance.
- If you receive a letter of demand, do not ignore it. If you dispute the amount owed, respond promptly to request clarification. If you believe the claim is invalid, contact a business advisory service for guidance.
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