What the letter should cover
A well-built demand letter usually tells a clear, accurate story of what happened, explains why the recipient is responsible, and sets out the losses with supporting documents or a summary of them. It names a specific amount or remedy and a reasonable date to respond. The tone should be firm but professional, since a judge, an arbitrator, or an insurer may read it later. Overstating facts or making claims you cannot support can damage your credibility. Before sending, make sure the amount reflects losses you can document, not only what you hope to receive.
What to leave out
Do not threaten criminal charges or a report to authorities as a way to get paid; tying a civil demand to a threat of criminal action can create serious problems for the sender. Avoid admitting facts that hurt your position, and leave out personal attacks. Keep a copy of the letter and proof of delivery. Sending a letter does not pause the deadline for filing a lawsuit, and a claim against a public body may require a formal notice of claim on its own short timetable. If the contract specifies how notices must be sent, follow that method exactly.
When a demand arrives on your desk
If you receive a demand letter for damages, do not ignore it, and do not respond in anger or with a full explanation before reviewing it with a lawyer. Check whether insurance may cover the claim and notify the insurer, since policies usually require prompt notice. Preserve documents and messages related to the dispute. In a first conversation we review the letter, the underlying facts, and the risk of a lawsuit, and help decide whether to respond, negotiate, or hold off. For senders, we can review a draft or prepare the letter ourselves, which tends to signal that the claim is being taken seriously.
