A breach of contract demand letter is a formal document sent to a party that failed to follow the requirements of a contract. This letter notifies them that they have violated the terms of the agreement and provides them an opportunity to comply.
Table of Contents
What is a breach of contract demand letter?
A breach of contract demand letter notifies the other party that they are responsible for the breach of contract. This demand specifies the details of the breach and informs them to comply with the contract otherwise legal action will be taken against them.
Moreover, a demand letter puts pressure on the breaching party by stating that litigation may ensue in case the issue isn’t resolved. Without going to court, you can get what you want through the demand letter. Sometimes, you also need this letter before filing a case in small claims court.
Why should you send a demand letter for breach of contract?
Here are the reasons for sending a demand letter;
- Demand letters prove very effective in states that require demand payment before filling. However, this requirement may depend on the state where you are filing a small claims court lawsuit.
- A demand letter for breach of contract indicates to the other party that you are serious about the problem. Also, it shows them that you have spent time and money to get your money back.
- With the help of this document, the other party resolves the issue without restoring to legal action.
- Keep in mind that you can only ask for monetary damages in most small claims courts. Thus, the court will only award you money if you win the lawsuit and the other party can’t do something. But, you can ask for any type of relief if you have a demand letter.
Key elements of a breach of contract demand letter:
Likewise any other business letter, a demand letter for breach of contract is drafted. They include a date and address at the top and a signature at the bottom. The content of the demand letter and the way by which it is communicated make this letter different from other business letters. With a well-structured demand letter, you can deliver a clear message to the recipient that you want to resolve the issue.
In addition, you have to include the following critical elements in your letter to communicate this information;
- Introduction
- Factual background statement
- Liability statement
- Description of damages
- Formal demand
- Evidence attachments
The proof of your allegations should also be included in the letter. The proof reinforces the message that you have stated in the contract and encourages the other side to comply.
When should you send a breach of contract demand letter?
It must be a routine part of running a business to send demand letters to stakeholders. Send this letter to a party who is in violation of their contractual responsibilities. State in the letter that you have noticed the relevant party isn’t following a specific provision and breaching their contractual obligations.
Here are some instances when you should send a demand letter;
- The suppliers not delivering products as expected
- The tenant isn’t paying housing rent payments in full.
- You as the tenant not receiving the security deposit from the property owner as expected.
- Your business partners don’t meet their obligations.
- You didn’t get paid for the work you have done or the service you have provided.
There are also some other cases that need a breach of contract demand letter.
How to write a demand letter for breach of contract?
Let us discuss step-by-step how to write this letter;
Include party details
You should include parties’ details in the letter such as their names, addresses, phone numbers, and other relevant information. Also, include your own contact details and any other party which is involved in the agreement. It might be appropriate to send a courtesy letter to additional parties involved in the contract.
Provide details about the breach
A breach of contract demand letter should describe how the other party violated the contract. It also includes all the pertinent details of that contract. To reinforce your argument and show you are serious, give reference of specific violated provisions.
Specify potential cures
In the letter, state what you expect of the breaching party in order to fix the problems they have created. You get the result of your desire if you are more specific about your expectations. Furthermore, it would be recommended to include a deadline date by which the breaching party must resolve the issue.
Warn of potential remedies
In a separate paragraph, state the consequences that the breaching party may face if they fail to cure their violations. To enforce the contract, specify whether you will pursue arbitration or litigation. From the original contract, include information that governs where a lawsuit may be filed.
Sign the letter
Include the name and title of the party who is sending the letter. Also, affix the signature of a sending party at the bottom.
Some additional tips for writing and sending this letter:
You must follow some reasonably critical best practices as a demand letter acts as a legal record. With the help of these practices, you can avoid making legal mistakes or conflicting statements. Consider the following tips while writing and sending this letter;
- Keep the length of your demand letter concise. You should keep it to a necessary length that provides you enough space to include all relevant facts.
- You should not use emotive language although it is natural to feel aggressive over a contract breach. You just have to stick to the pertinent details.
- State in the closing paragraph what you expect from the breaching party and a date by which they must resolve the issue.
- Describe the damages that you met due to the other party and how much they cost you.
- It would be highly recommended to send a breach of contract demand letter through certified mail.
Moreover, it isn’t easy for a non-legal professional to write this formal letter. They even don’t know which issues are in focus and what laws were broken. You may face legal problems due to an illegal or poorly-written demand letter. Therefore, you should hire a business lawyer to write and send this formal letter.
Sending a breach of contract demand letter:
You should send this letter via email or mail. If you send them through mail then consider the following;
- Tracking: you should track your demand letter to know whether or not it has reached the other party’s mailbox.
- Signature required: a signature request isn’t required necessarily. The postal carrier must hand-deliver the letter when you send it with a request for the receiver’s signature. It would be difficult for the post office to obtain the signature if you are sending it to an individual.
Don’t send a demand letter for breach of contract with a signature request to individuals at a home address. Instead, send a signature required mailing to a business that is open during regular delivery hours.
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FAQ’s
When should you take legal action after sending a demand letter?
When the breaching party doesn’t respond or rejects the demands specified in the letter then it is necessary to take legal action. You should take the other party to small claims court in case you have suffered significant financial damage.
When to hire an attorney?
Hire an attorney if the case involves complex issues and large sums of money. You can also hire an attorney before going to court so that they can review your case and provide you with suggestions.
Is a demand letter for breach of contract serious?
Yes, sending a demand letter indicates that an entity is serious about resolving a specific issue. If the breaching party ignores it, they may face legal action.
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