letter of demand
Definition
A letter of demand is a formal written notice you send to someone who owes you money or has wronged your business, telling them exactly what you want and giving them a deadline to fix it. Think of it as your last serious warning before you take legal action, and it shows any future court that you tried to resolve things first.
Example
If a client refuses to pay a $5,000 invoice after several friendly reminders, you would send a letter of demand giving them 14 days to pay before you file a claim in court.
Watch Out
Sending a letter of demand starts the clock ticking on negotiations, so make sure your dollar amount and facts are accurate before you send it because mistakes can weaken your legal position later.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.