Definition
A formal written request from one party to another demanding they fulfill an obligation or return earnest money. Demand letters signal serious intent before litigation.
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A demand letter is a precursor to litigation, giving the other party a final opportunity to comply before legal action is taken. It should document the specific obligation, the deadline for compliance, the consequences if the deadline is not met, and often includes supporting documentation. Demand letters are more formal than casual requests and signal serious intent to enforce the contract.
Pro Tip
Document issues thoroughly before sending a demand letter. You need evidence supporting your position.
Example
When a seller fails to repair the roof by the deadline and repair negotiation fails, the buyer's attorney sends a demand letter requiring the seller to either complete the repairs within 7 days or face breach of contract litigation.