LETTER OF DEMAND"Letter
of demand" is a general term which describes any letter from one party
to another demanding that the second party either take a particular
action or not take that action.
In business, the issuing of
letters of demand is a regular occurrence. It is the normal preliminary
step to commencing court proceedings.
The simplest letter of
demand is for payment of money. Demands can also cover any type of
contractual breach or other breakdown in a business relationship.
Letters of demand can also be used in non-business disputes, such as between neighbours.
As
the name indicates, a letter of demand simply demands what the party
issuing it wants and claims to be entitled to. There is no law which
specifies what letters of demand generally must say or contain, and in
many cases they have no legal status. They can however have a
significant impact on the parties’ legal rights, and can damage a
party’s position if incorrectly drafted.
The first step
in drafting a letter of demand will be to consider whether there is any
formal requirement for its contents. The most important place to look
is the contract, if there is one. Many contracts specify what a demand
must contain, and other matters such as where it should be sent. If the
letter does not comply with the contractual requirements, it will be
ineffective. If this happens, the party issuing it may not have the
right to commence proceedings.
These general principles should always be followed.
- Check the contract and follow its requirements to the letter.
- State specifically the details of the breach and what the recipient
is required to do (eg pay money, stop throwing rubbish over your fence,
etc).
- Allow a reasonable time period for the
recipient to comply with the demand. What is reasonable will vary
widely. In some case as little as a few hours might be appropriate. For
payment of money, seven days is generally a minimum.
- State what will happen if the demand is not complied with.
- Make sure you can prove that the letter of demand was served on the
recipient. Again, check the contract for any requirements in this
regard.
There are a number of other principles to be taken
into account, and of course you should always give serious
consideration to whether to seek legal advice before issuing a demand
at all.
Disclaimer:
No investment advice provided to you.
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personal financial or investment advice. Information provided
does not take into account your particular investment objectives,
financial situation or investment needs.
You should assess whether the information on this web site
is appropriate to your particular investment objectives, financial
situation and investment needs. You should do this before
making an investment decision on the basis of the information
on this web site. You can either make this assessment yourself
or seek the assistance of any adviser.
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