Demand Letters: What Are They?

You have a dispute with someone or with a business, for example, over an amount of money or for services? You want to resolve the problem and even go to court if you have to? You should send a demand letter, and in some cases, you must send a demand letter.

A demand letter gives you a chance to clearly and formally explain to the other person what you think he did wrong.

Important! Before you go to court, you have a duty to consider other ways to settle your dispute, such as negotiation or mediation. You can do this either before or after you send your demand letter.

Do You Always Have to Send a Demand Letter?

In most cases, no!

By law, you have to send a demand letter or written notice similar to a demand letter only in very specific cases. For example:

• When a seller of a building wants to cancel the sale, the seller sometimes has to send the buyer a demand letter. If the seller doesn’t send the letter, she cannot take back possession her building.
• When you discover a hidden defect or when you want to sue a municipality for damage to property, you have to send a notice to the person or municipality in question. This notice is only to notify them of the situation that is a problem for you. If you don’t send this notice or if you send it too late, you could lose your right to be compensated.

If you’re not sure whether you have to send a demand letter or similar notice, it’s best to send one anyway, or to consult a lawyer.

Why Send a Demand Letter When You Don’t Have to?

Here are some reasons:

• A demand letter can encourage the other person to resolve the dispute to avoid being sued. In some cases, sending a demand letter shows the seriousness of the situation. You could also use a demand letter to show that you’re willing to find other ways to settle your dispute.
• If you take legal action against someone, you have to pay court fees. Usually, you get them back if you win your case.
  
  However, if you take legal action without sending a demand letter and the person agrees in a reasonable time to do what you’re asking, you won’t always get your fees reimbursed. You will probably have to pay them even if, in theory, you won your case.
• If you are trying to get money, a demand letter serves as the date interest on the amount begins to run.
  
  If the person you put on notice does not pay you within the time you give in the letter, interest will start to run.

Automatic Notice Without Sending a Demand Letter

The law says that there are some situations in which a person is automatically “put on notice”. This means that you use the advantages of a demand letter without having to actually send one. But you still have a duty to consider resolving your dispute without going to court.

Here are examples of cases where a person is automatically put on notice of a demand (en demeure):

• A contract you entered into provides that the other person will automatically be put on notice if she does not do what she promised to do on time.
  
  Example: A contract for a loan of money could say that if a person is late repaying the loan, she will automatically be put on notice.
• The person with whom you have a dispute did something that she agreed not to do.
  
  Example: While you were away on vacation, your neighbour built a four-metre wall in his yard. You clearly agreed with him that the wall would be no higher than two metres.
• There is an emergency and you have to act immediately to resolve the problem.
  
  Example: It has been raining very hard for two days and the roof of your new house is leaking. The ceiling, walls and your furniture could be damaged if you don’t react quickly.
  
  In this case, you must first try to contact the person who sold you the house. If you’re unable to reach her or she doesn’t react, you can quickly have the roof repaired by a professional and claim what you paid later.
• The person you have the dispute with has clearly told you she will not give in to your demands.

Note that a person put on notice automatically might not be aware that he has been put on notice automatically. It can therefore be useful to send a demand letter to make sure the person knows about it. This could encourage him to react to avoid more serious problems.