DEMAND LETTER

A letter from a lawyer, on behalf of a client, that demands payment or some other action, which is in default. Demand letters are not always prerequisites for a legal suit but there are exceptions such as legal action on promissory notes or if the contract requires it. Basically, a demand letter sets out why the payment or action is claimed, how it should be carried out (eg. payment in full), directions for the reply and a deadline for the reply. Demand letters are often used in business contexts because they are a courtesy attempt to maintain some goodwill between business parties and they often prompt payment, avoiding expensive litigation . A demand letter often contains the "threat" that if it is not adhered to, the next communication between the parties will be through a court of law in the form of formal legal action.