Legal Dictionary
demand letter
Legal Definition of demand letter
Noun
- 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 (e.g.. 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.
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Definition of demand letter
Further reading
A demand letter, or LOD, ie. a Letter Of Demand (of payment), is letter stating a legal claim (usually drafted by a lawyer) which makes a demand for restitution or performance of some obligation, owing to the recipients' alleged breach of contract, or for a legal wrong.
In the United States, demand letters from a debt collector relating to a consumer debt must comply with the Fair Debt Collection Practices Act.[1]
In some cases in Canada, a demand letter is mandatory; without it, a person could lose his or her case.[2]
References
- 15 U.S.C. § 1692g
- http://www.justice.gouv.qc.ca/English/sujets/glossaire/mise-a.htm
References:
- Wiktionary. Published under the Creative Commons Attribution/Share-Alike License.
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