When you receive a demand letter, it usually means that another individual or group expects you to perform some action and is giving you a final chance to do it before they take legal action. It is then up to you to respond by either doing the asked action, refusing to, or ignoring the message. All of these actions will have consequences. In this article, we look at what the proper response is to a demand letter.
What Is a Response to Demand Letter?
A Response to Demand Letter is a reply to a demand letter, such as a demand for payment. It is a show of good faith to match the sender’s attempt to resolve the matter out of court. While it might not eliminate the conflict, it could be presented in court – if the case goes to trial – as evidence that you responded to the sender’s demand.
Response to Demand Letter (Word Template)
Because a demand response letter reacts to the information provided in the first demand letter, it should be drafted so that it answers, rejects, or challenges the initial claims. Here is what your letter should contain to do this:
- A summary of the claims made in the original demand letter, even if you dispute them.
- Your version of events if you disagree with the original claim
- Evidence to corroborate your version of events
- A viable solution for the dispute
The best response to a demand letter tries to find common ground with the demander and a possible solution. That said, you should never admit fault through a response letter as your admission could be used against you in court.
Sample Response to Demand Letter
2 August 2031
0009 Base Boulevard
New Orleans, LA 12940
Re: Response to Demand Letter 002/D
Dear Patricia Higgins,
I am writing in response to your demand letter, dated 29 July 2031. In that correspondence, you demanded that I pay $700 for an outstanding debt for cleaning services rendered to my residential home on 12 August 2031.
I agree that I received said services from your company on the date highlighted in your letter. However, I have attached an invoice provided by your team that puts the due amount at $450. I have also attached a receipt stamped by the manager, Killian Watkins, showing that I paid the amount in full.
While I understand that documents can get mixed up, I do not think it fair that you keep sending me demand letters for a debt I do not hold. Kindly check your records and set this matter straight.
What to Do If You Receive a Demand Letter
There are several options available to you when you receive a demand letter. Depending on the content, you could decide to:
- Agree to the terms set in the demand letter and settle the dispute.
- Reach out to the sender or their attorney to inform them that you refuse to meet their terms and explain your reasons.
- Reach out to the sender or their attorney, challenge their claim and suggest an alternative dispute resolution channel like mediation.
- Ignore the letter. You should know that this could end with you being sued in court.
Regardless of the choice you make, always consult your attorney to learn about your best options. It is also advisable to contact your liability insurer if the issue at hand could lead to legal action being filed against you for liability.
Things to Consider Before Responding to the Demand Letter
Before drafting a Response to Demand Letter, here are some questions you should ponder:
- Is the sender justified in making their claims?
- Is the cost of going to court more or less than that of settling the dispute?
- (For payment demand letters) Is the amount the sender is asking for reasonable?
- Will you need an attorney to represent you in court?
If the demander’s claim falls below $15,000, they can only file a case in Small Claims court. Defendants and plaintiffs in this court cannot be represented by an attorney, so this is another important consideration.
How to Respond to a Demand Letter
If you have considered the factors discussed in the previous segment, you are now ready to prepare your response. Here is how to do that:
Step 1: Review the letter
Evaluate the merits and validity of the claims in the letter? Is the account of events accurate? Do the facts justify the demands the sender is making? Remember, even an accurate account doesn’t translate to your financial blame, so don’t admit liability.
Step 2: Identify the Intent
Ascertain whether the sender has sent the letter in good faith or is trying to extort you. If you are uncertain, have your attorney review the letter.
Step 3: Consult an Attorney
Have your attorney review the letter and advice you on the next step forward. They can even draft and send your response to lend it an air of credibility.
Step 5: Respond
Send the response within the timeline stipulated in the demand letter.
Frequently Asked Questions
You don’t really need an attorney to respond to a demand letter on your behalf. However, having one does add legitimacy to your letter and can ensure you follow state guidelines.
Failing to reply to a demand letter gives its sender the go-ahead to take legal action against you. If this happens, the court will expect you to explain why you did not respond to the letter.
You should never ignore a demand letter unless it is a hoax or your attorney advises you to do so. Some unscrupulous people can use demand letters to try and extort you, negating your need to respond.
No. But while it is not a legal requirement, a demand letter can be used in court as evidence.
A demand letter is usually sent to inform you that you must remedy a situation or face legal action. Contrary to what many people believe, ignoring such a message does not automatically make it go away. In fact, it could add to your legal problems. This is why it is important to prepare a Response to Demand Letter that either seeks to solve the problem or record your side of the story. Remember, you should never admit liability in your response, or this could be used against you in court.