A demand letter is a letter you use to state a legal claim and demand restitution for a breach of contract or legal wrong. If you’ve had a client fail to pay your contracted fees, you might want to consider sending a demand letter.
I’m not a lawyer and I can’t give legal advice. However, I’ve used demand letters to get clients to pay up. Here’s what a lawyer told me should appear in a demand letter…
What to include in a demand letter
- contact information for all parties, especially your address
- notice that this is the final step before action is taken
- summary of what terms of the contract were breached (e.g. failure to pay $X by a certain date)
- a reasonable amount of time for the other party to reply (e.g. payment must be received by June 30, 2007 at 12 noon Pacific)
- what you are seeking (e.g. $1277 for consulting fees)
- the use of "without prejudice" at the very beginning of the letter, so that your letter cannot be used as an offer of settlement in court.
Send your demand letter by registered mail. This gives you a paper trail, so you can prove you sent it. And follow up with enforcement afterwards. Small claims court has proved an excellent way for me to go after deadbeats. And I’ve won both times, during the mediation phase.