What is a Letter of Demand?

Share at:
AI Share Buttons - Mobile Logo Only
LinkedIn
X
Facebook
WhatsApp
Threads

Did you give a personal loan to a family member, and they haven’t paid back? Or granted a customer an IOU and they haven’t paid you for your product? How frustrating!

Thankfully, there are these letters called Letters of Demand! There is no assurance that your debt will be paid back, but at least you have a good paper trail of your demands of payment should you decide to take further legal action.

A Letter of Demand is given to a party by another party who believes they are owed a certain amount of money, and threatens to commence legal action if the debt is not paid within a period of time (usually 14 – 28 days).

Why send a Letter of Demand?

Sending a Letter of Demand warns the other party that your demand for payment of outstanding money is the final opportunity before you take the matter further. Besides being a warning, it is also cost effective, especially if the Letter of Demand is effective and payment of the debt is made.

Where the dispute goes to a tribunal or court, the letter can be used as evidence that you have taken reasonable steps to seek payment of the debt. If you are a recipient of a Letter of Demand, it is proof for your points of dispute, for example, if the claimed debt is too steep and unreasonable.

What should be included in a Letter of Demand?

It usually states the amount outstanding, and a schedule or date that amount is payable before further legal action is taken. Any relevant documents should be attached to the Letter of Demand, including any tax invoices, contracts, agreements and/or prior letters of demand to assist the other party in understanding why the debt is owed.

It is best to hand the letter of demand over in person. If that is not an option, sending by registered mail or fax is the next best option. Remember to retain a copy of the letter for your own purposes!

Need to demand repayment of debt? With LawPath you can now create a Letter of Demand in under 2 minutes.

Unsure where to start? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

Share at:
AI Share Buttons - Mobile Logo Only
LinkedIn
X
Facebook
WhatsApp
Threads
Most Popular Articles
You may also like
Recent Articles

Get the latest news

By clicking on 'Sign up to our newsletter' you are agreeing to the Lawpath Terms & Conditions

Share:

eBook

Download our eBook,
Hiring Your First Employee

Our eBook covers the necessary legal and financial considerations you should make when hiring your first employee.

You may also like

From Singh to Smith, discover the surprising names driving Australia’s entrepreneurial boom backed by data.
EasyCompanies has shut down, but your business is still safe. Learn what this closure means and how Lawpath can help you move forward.
Australia’s startup culture is getting younger, with Gen Z and Millennial founders driving the fastest growth in new businesses.