How To Respond To A Demand Letter

Anyone who feels they deserve monetary compensation from you can send you a demand letter. You should know how to reply to such a demand letter to prevent further legal or financial complications over the same issue. Below are some of the steps you can take if you receive a demand letter.

Avoid Inaction

The worst thing you can do is to try to wish away the demand letter. You need to act even if you think that the complainant is exaggerating the claims (true in many cases) or if you think that the demand letter is not based on facts. If you don't act, the complainant will have no choice but to file a lawsuit against you. That will force you to respond (you can't ignore a lawsuit), and you may end up spending more resources than you would have spent if you had replied to the demand letter. Don't forget that defending a lawsuit, even a frivolous one, requires some resources.

Asses The Letter's Claims

Your first act should be to scrutinize the demand letter and understand its contents and intentions. Scrutinize the allegations and itemize them, if there are multiple allegations. Investigate the issues raised by the complainant to determine their truthfulness.

Take note of any time constraints or deadline the complainant has raised. For example, if an answer is expected within a fortnight, ensure you have an answer before that time so that the complainant doesn't think you have ignored them.

Determine Whether You Need a Lawyer

You also need to decide whether you need a lawyer if you don't have one already. The seriousness of the allegations, the demands of the complainant, and the facts at hand are some of the factors that determine whether you need a lawyer.

For example, you do need a lawyer if the complainant is demanding serious money from you. You also need a lawyer if the complainant has raised serious issues that appear to be true. You may also need a lawyer if you want to give weight to your answer and show the complainant that you are not joking around. This may be necessary if the demand letter has raised exaggerated claims.

Respond To the Letter

Lastly, you need to draft a formal letter in reply. Your lawyer, if you have one, will draft the reply. Address all the issues raised in the demand letter and ensure it reaches the complainant before the stated deadline if there is one.

For more information, contact a business litigation lawyer.