A legal letter of demand is a document that serves as a formal notice of a legal claim. It is often used in dispute resolution processes before legal proceedings are initiated. Using a letter of demand is an important formal first step to take while recovering money owed to you. In Australia, there are specific guidelines and legal requirements for writing a letter of demand.
What Should You Include in a Legal Letter of Demand?
A letter of demand in NSW, Australia must contain the following information:
- The name and address of the sender
- The name and address of the recipient
- The date of the letter
- A clear and concise statement of the facts giving rise to the claim
- A statement of the action that the sender is demanding that the recipient take
- A deadline for the recipient to comply with the demand
- A statement of the consequences of non-compliance
In addition to the information required by law, a legal letter of demand may also include the following information:
- A copy of any relevant documents
- A statement of the legal basis for the claim
- A demand for compensation
- An offer to settle the matter out of court
Here’s a template of a legal letter of demand.
Letter of Demand Template 1
The following template is designed for a customer who wants to send a payment reminder to the other party. It also operates as an invitation to private discussions whilst avoiding reference to the NSW Small Business Commission’s mediation services or reference to taking the matter to litigation.
Select date
[your business name]
[business address]
[contact details]
[other party’s name]
[other party’s address]
Dear [name],
I am writing in relation to the amount of $[enter amount ‘including GST’]. According to my records this was due to be paid by you on select date and remains outstanding.
The amount relates to [describe services] provided to you on [select date].
Please find enclosed a dated copy of the invoice and note that it specifies [describe payment terms and instructions]. I have also enclosed the following documents:
1. [insert name of document or delete if not required]
2. [insert name of document or delete if not required]
[List and enclose previous requests for payment and any other relevant documents that support your claim for the amount owing.]
Please be advised that I require payment of the invoiced amount within [insert number of days by which you seek payment e.g., 14 days] of the date of this letter.
I wish to resolve this matter in a cost-effective and timely manner. If you wish to discuss this matter further, I invite you to contact me on [insert contact details] without delay.
Yours sincerely,
[your name],
[your role]
Letter of Demand Template 2
The following template is designed for customers wanting to request payment, as well as provide notice to the other party that they want to settle the matter through private negotiations or with the assistance of the NSW Small Business Commission’s mediation services.
The letter avoids any reference to litigation and acts as an invitation to start negotiation.
Select date
[your business name]
[business address]
[contact details]
[other party’s name]
[other party’s address]
Dear [name],
RE: Outstanding Invoice
I am writing about the outstanding amount of owed money to [insert your business name/your company name].
The total amount owing is $[enter amount ‘including GST’]. This amount relates to [describe services or goods] provided by [insert business name/company name] under agreement with you. I refer to the invoice dated [insert date] that was due for payment by [insert date].
I request that the amount of [insert amount] be paid by [insert the date when you want them to pay you the money]. If you are unable to make the payment, I invite you to contact me without delay.
I am willing to settle this matter in a cost-effective and timely manner, either through private discussions or with the assistance of the NSW Small Business Commission’s mediation services.
Yours sincerely,
[your name],
[your role]
Legal Letter of Demand Checklist
- Have you already tried friendlier means to recover the unpaid debt, such as a polite phone call or late payment reminder letters?
- Does it include precisely accurate information? Could anyone say that something in the letter is false or misleading?
- Does it include a late payment interest rate? (Only include this if it was specified in the contract.)
- Does it inform the other party of any further action you’re not willing to take? (You should only mention action that you’re prepared to take.)
- Is it polite and respectful?
- Did you invite the other party to consider alternative dispute resolution for the debt owed?
- Have you signed and dated it?
- Have you attached copies of all relevant supporting documentation? (For example, a contract, invoice, first and second late payment reminder letters, and any relevant emails, faxes or letters.)
- Have you kept a copy of the original documents and the signed legal letter of demand?
- Did you send the letter to the registered post?
Tips For Writing an Effective Legal Letter of Demand
1. Clearly state the purpose of the letter. The first line of your legal letter of demand should clearly state that it is a letter of demand. This will immediately inform the recipient of the seriousness of the matter.
2. Identify the parties involved. Identify yourself and the recipient of the letter. If you are writing on behalf of a company, make sure to include the company’s name and contact information.
3. Outline the details of the debt owed. Provide a clear and concise explanation of the debt, including the amount owed, the date it was due, and the basis for the debt (e.g., unpaid invoice, breach of contract).
4. Attach supporting documentation. If you have any supporting documentation, such as invoices, contracts, or emails, attach them to the letter. This will help to substantiate your claim.
5. Specify a deadline for payment. Provide a reasonable deadline for payment, typically 7 to 21 business days. This will give the recipient time to address the issue without being overly pressured.
6. State the consequences of non-payment. Inform the recipient of the potential consequences of non-payment, such as legal action or damage to their credit rating. This may encourage them to take the matter seriously.
7. Use a professional and respectful tone. While you are making a demand, it is important to maintain a professional and respectful tone throughout the letter. This will increase the likelihood of a positive resolution.
8. Seek legal advice if necessary. If you are unsure about any aspect of writing a letter of demand, it is always advisable to seek legal advice from a qualified lawyer. They can help you ensure that your letter is legally sound and effective.
Resolve Your Debt Claim Effectively
A letter of demand is usually sent when a person is owed money and has tried unsuccessfully to get payment. It is usually the last step taken before commencing legal proceedings. A lawyer can write a letter of demand for you on the law firm’s letterhead. This can sometimes encourage the hirer to pay the debt promptly.
Don’t let a lack of legal knowledge hinder your chances of success. Avail the expertise of a qualified lawyer to draft a powerful legal letter of demand that gets the results you deserve without the need of going through court proceedings.
Contact us at JB Solicitors if you want to commence legal proceedings for other matters.
