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Demand Letter Template

Demand Letter Template

A demand letter is instrumental in resolving a dispute between two or more parties. Hence, it has to be drafted tactfully for initiating immediate settlement and avoiding the dispute from escalating. This article will not only provide you with templates of demand letter but will also give you more information about drafting it.
Kundan Pandey
Many times, it happens that the other party who is in some way obliged to pay or return your money does not respond to your consistent requests or shows no signs of commitment to pay you back. In such cases, eventually, the borrower or the other party is liable for a legal action. However, as a mark of professionalism, you should send a demand letter, as a last and final warning to the other party. This letter should emphasize the fact that if they are unable to pay the money within the stipulated time, you will be left with no choice but to take strict legal action against them. This may prompt the other person to understand the gravity of the situation and return the money.

However, if they still do not respond to your letter, you can seek legal help. Another important utility of a demand letter is that, if the conflict goes to court, it will help in establishing the fact that you gave the opponent a fair chance to repay the money.

Drafting the Demand Letter

While writing demand letter, one must not only focus on good writing skills but also on the history of the dispute and other important details. While briefly mentioning the history, mention it in a chronological order. The letter should also mention your efforts in recovering the amount like meeting them in person, mailing them or calling them. The writer must be able to establish a clear communication with the other party through the letter. It is preferable to have short and precise letter. In case of a debt recovery, please mention all the due dates and amounts correctly. If you are ready to settle for a lower amount, mention it in the letter and give a deadline. Keep the tone of the language stern, however, at all costs avoid threatening them in the letter. In case of a lawsuit, it will not reflect you in a positive light. Also, if the other party gets offended, it is likely that they will not settle the dispute easily. Here are a few tips which will help you to draft your own demand letters. 

Some Tips

Refrain from making personal comments or remarks. Mention your legal right to get the money back and state it clearly without beating around the bush.
» Always prefer sending printed and typed letters as they appear more professional. Also, make multiple copies of the letter, for your record, before sending it.
» Mention what you demand in return of the late payment. Do not forget to describe the previous poor response of the other party about returning the money. Grant a deadline for them to repay.
» Lastly, state that you can take legal action, if the other party continues to ignore your warning.
» Do not forget to send the letter by a certified mail or courier. This will give you a return receipt which you can store along with the copy of letter as an evidence for strengthening your case in the court. 

Demand Letter Template

Name and address of the person

Dear (Mr./Ms. surname of the person),

Para 1
  • Explain the history of the transaction.
  • If possible, include all the important dates.
  • Note the exact duration for which the amount has been overdue.
  • Mention the accurate amount that is due from the other party.
  • Explain your efforts to bring this matter to his/her notice.
Para 2
  • Describe the problems experienced by you because of the overdue amount.
  • If it has led to additional expenditure on your part, mention it promptly.
Para 3
  • Claim the exact rate of interest accumulated along with the principal amount.
  • You may also ask for the additional expenses incurred in relation with this matter.
  • Set a deadline for them to pay you back.
  • Inform them that you may seek legal intervention if he/she does not comply with your demand letter.
  • You can also mention your contact number along with the best time to reach you.
Closing line (Optional)
  • You may or may not end the letter with a closing line.
  • For example, "Kindly govern yourself accordingly".
Yours truly/sincerely,
(Your full name)

Sample Demand Letters

Demand Letter for Security Deposit
Sean Parker
22, Galaxy Apartments
123, Marinara Street
Brentwood, California

Dear Mr. Parker,

It has been more than two months since my tenancy ended. You have still not refunded my security deposit of $1000 which, as per our agreement, should have been returned within the first thirty days after the end of tenancy. Even after repeatedly reminding you on the phone, you are showing no interest in returning the money.

Owing to this, I am not able to pay the security deposit of my new rented place and can be asked to vacate the apartment anytime. If you continue to ignore my warnings, I will have to take a legal action against you.

I am giving you an ultimatum of a week's time. If you do not repay the amount of my security deposit, along with 5% interest, I will be forced to file a lawsuit against you in the Small Claims Court.

I hope you will act on this immediately.
Emily Trump
Former tenant at: 30, Galaxy Apartments,123, Marinara Street, California
Current address: 200, Riviera Apartments, 42, Blue Diamond Street, California

Demand Letter for Late Payment

Mary Smith
Finance Director
Techpro Pvt. Inc.
454, Mark Street
Fulton, New York

Dear Ms. Smith,

This letter will serve as a last piece of warning to you. As you are aware, Techpro Pvt. Inc. is in default of its obligation to repay the amount of US $ 120,000 which was advanced to you on January 5th, 2013. This amount has been overdue for the last sixty days. Even though we have tried to contact you several times and sent you three reminder letters, you haven't shown any strong commitment to repay the money.

Please note that as per our terms and conditions, you will have to pay back the amount along with the accrued interest of 10% (mentioned in our second reminder). Hence, now the total amount payable to the bank is $132,000.

Unless the payment is made within the next ten days of the delivery of this letter, we will have no choice but to send you a legal notice.

Kindly govern yourself accordingly.
Yours truly,

Mark Francis
Chief Manager
INF Bank

Demand Letter to Contractor
Josh Jackson
Best Plumbing solutions
56, Charles Street
New Albany, Indiana

Dear Mr. Jackson,

About a month back, you fixed the pipes in our bathroom. As per our agreement, we had paid you an extra amount of $500 to specially fit leak-proof piping system. However, within 15 days one of the new pipes started leaking and eventually cracked. When this was brought to your notice, you went on to completely deny that it was your fault and blamed it on the water pressure.

As per our agreement, if anything happened to the pipes within the first three months, you were to replace them for us. Owing to your convenient shrugging of responsibility even after reminding you several times, we had to shell out an additional $100 to mend the pipe from Plumbing Genius Agency as we could not allow the leakage to cause further damage to our house.

I expected quality services for the amount I had paid you, which was already higher than the industry standards. Therefore, please arrange to pay $100 towards the additional expenditure borne by us within the next three days. I am attaching, herewith, a copy of the receipt from Plumbing Genius Agency for your perusal. Please note a lawsuit is imminent, if you fail to make the payment by Friday March 20th, 2013.

Yours sincerely,
Daniel Howard

You may use these samples to customize your demand letter. Always remember, to draw attention to the conflict, its history, your efforts to settle the dispute and an ultimatum to repay the amount. Often it has been observed that demand letters do make an impact and people have got their money back in many cases. Nevertheless, even if things don't work after writing the letter, you can promptly file a legal suit against the other party in the Small Claims Court.

Disclaimer: The content on this page is intended for educational use and not to be construed as legal or professional advice.