Here in New York, money is exchanged every single day. Contracts are signed, services are rendered, and promises are made. And for the most part, those promises are honored. However, unfortunately, we do not live in a perfect world, and there are times when business clients simply fail to pay what they owe or refuse to comply with the terms of an agreement. When that happens, you may find yourself wondering what your options are. You may not want to rush right into a lawsuit, but at the same time, doing nothing is rarely the answer. This is where a demand letter often comes into play. Read on and contact our Rochester collections lawyers to learn more about how your business may benefit from an attorney demand letter.
What is included in a demand letter?
A demand letter is a formal written document that outlines your legal claim and demands specific action, most commonly payment of a debt, within a certain period of time. Though many people assume a demand letter is simply a strongly-worded request for payment, it is actually far more structured than that. A properly drafted demand letter is deliberate, strategic, and carefully worded so that it both communicates seriousness and protects your business rights. Generally speaking, a demand letter will include the following:
- A detailed explanation of the facts, including when the agreement was made and how it was breached
- A clear statement of the amount owed and how that amount was calculated
- Reference to the legal basis for the claim, whether it be breach of contract, unpaid invoices, or another violation
- A specific deadline by which payment or corrective action must be made
Why is a demand letter important before filing a lawsuit?
It is natural to assume that if someone owes your business money, you must immediately sue them to recover it. However, that is not always the best approach. In fact, many disputes are resolved long before a courtroom is ever involved. A demand letter is important because:
- It demonstrates that you are serious about enforcing your rights
- It creates a written record of the dispute
- It provides an opportunity for voluntary payment or negotiation
- It may satisfy contractual or statutory notice requirements
Courts often look favorably upon parties who attempt to resolve disputes before filing suit.
When should you hire a collections lawyer to send a demand letter?
While anyone can draft a letter requesting payment, there is a significant difference between a casual email and a formal demand issued by legal counsel. The tone changes. The stakes change. The way the recipient views the situation often changes as well. You should strongly consider working with an attorney if:
- The amount owed is substantial
- The debtor has ignored prior requests
- The claim involves a written contract
- You want to ensure you are fully prepared for litigation if necessary
Lacy Katzen LLP can evaluate your business claim, determining whether the amount you are seeking is legally supported, and draft a letter that is both persuasive and protective of your rights. And most importantly, if the demand letter does not result in payment, we are prepared to take the next step. Reach out to Lacy Katzen LLP so we can help you.
