Receiving a demand letter can feel threatening — and sometimes, that’s the point. Whether it arrives by certified mail or email, a demand letter signals that a legal dispute is forming. While demand letters can be serious, they require strategy, not panic. This post explains what a demand letter is, what it means legally, and how to respond without making matters worse.
What Is a Demand Letter?
A demand letter is a formal communication, usually from an attorney, in which one party outlines a grievance, states what they want, and threatens legal action if their demands are not met.
Typical demand letters include:
- A description of the facts giving rise to the dispute
- A reference to a breached contract, unpaid debt, or wrongful conduct
- A specific demand for money, action, or a legal remedy
- A deadline for compliance
- A warning that legal action may follow if the demand is ignored
Demand letters are not lawsuits, but they are often the first step in one. They are also sometimes used to test the other party’s willingness to resolve an issue informally.
Should You Respond to a Demand Letter?
In most cases, yes — but not before evaluating it carefully. Here’s why a proper response is important:
- A thoughtful reply may prevent litigation. Many disputes settle or de-escalate through professional negotiation.
- Your response can shape the record. If the case later goes to court, your demand letter response may be an exhibit. It is critical that it be measured and accurate.
How to Respond the Right Way
- Do not respond emotionally. Angry or defensive replies often create more risk.
- Do not admit fault. Even small concessions can later be interpreted as liability.
- Do not ignore it. As tempting as it may be, this often increases the likelihood of a lawsuit.
- Speak with an attorney before responding. An experienced attorney can help you:
- Evaluate the strength of the opposing party’s claims
- Draft a strategic response
- Negotiate on your behalf if needed
- Minimize the risk of escalation
In some cases, your attorney may advise not responding at all, especially if the claims are frivolous or if litigation is already likely. However, that decision should be made carefully.
What If You Sent the Demand Letter?
If you are on the sending side, a demand letter can be a useful tool to initiate negotiation. It shows seriousness, sets expectations, and helps resolve disputes without the cost of filing suit.
However, a poorly written demand letter, especially one filled with legal misstatements or unreasonable demands, can backfire. If you are thinking of sending a demand letter, consult counsel first. A strong, legally sound demand letter often produces the fastest resolution.
Conclusion
Demand letters are a legal warning shot. Whether you have received one or are thinking of sending one, how you handle it matters. A well-planned response can protect your rights, avoid unnecessary litigation, and lead to a favorable outcome.
If you have received a demand letter or are considering sending one, contact our office to schedule a consultation. We can help you evaluate your position, understand your options, and take the proper next step.