Final demands – Tutorial
What is a letter of demand?
A letter of demand is sent to a person or organisation who owes you money (a debtor) following your supply to them of goods or services (eg. sale of artwork or performance fees). The letter advises the debtor of the amount outstanding and threatens court action to recover the debt if it is not paid within a certain time.
Why send a letter of demand?
A letter of demand serves two purposes. First, it warns the debtor of your intention to begin legal proceedings unless payment is made. Secondly, the letter is a document which may be shown as evidence during court proceedings as written proof of your claim of the debt owed and your attempt to settle the matter.
Copies of any relevant documents such as contracts, letters of agreement, invoices, etc, should be listed and attached to the letter of demand to assist the debtor in identifying the transaction and their liability to pay.
It is advisable to send the letter of demand by registered post or fax to confirm receipt and don't forget to retain a copy for your records. Only one letter should be sent and you should be prepared to act on your threat to initiate legal action otherwise the debtor may simply call your bluff.
When sending a letter of demand, you should be careful not to:
harass the debtor – they have the right to complain about this behaviour to particular government agencies and the police send a letter which is designed to look like a court document because this is illegal in most countries
SAMPLE LETTER OF DEMAND
(date)
(debtor's name & address)
Dear Sir/Madam (or name of the person if known),
I am writing concerning the amount of $(amount) which was due to be paid on (date) and remains outstanding despite my requests for payment. This amount relates to:
(include whatever is appropriate, e.g.
goods supplied to you by me at your request, and being (insert a brief description of the goods and any relevant dates) services provided to you by me at your request, and being (insert a brief description of the type of service and any relevant details) monies due to me pursuant to the terms of our contract dated (date) and being for (insert a brief description)
I enclose (include whatever is appropriate, e.g. my original invoice dated (date) OR our contract).
I demand that payment of the full amount be paid to me at the address stated below within (no. of days usually 7 or 14 days) days from the date of this letter.
If this matter is not resolved by this time I may commence legal proceedings to recover the debt without further notice to you and this letter may be tendered in court as evidence of your failure to attempt settlement.
However, without prejudice to my rights for full recovery of the debt, I am prepared to:
(include whatever is appropriate, e.g. accept the amount of $(a lesser sum) as full and final settlement of the debt if paid within 7 days (or other appropriate period) from the date of this letter/ accept installments of $(amount) per week/month until the debt is fully paid, the first installment to be paid on (date) into (specify address/bank account details) and thereafter on the first working day of every week/month until the debt is fully paid.)
Yours sincerely
(your name, address and other contact details)