Definition - What does Demand Letter mean?
A demand letter, also referred to as a Letter of Demand (LOD), is a written statement that makes demands for restitution or repayment. While the demand letter can be written and sent by an attorney, individuals may also write demand letters.
Justipedia explains Demand Letter
Demand letters are often used in tort cases, commercial law cases and contract cases. The information contained in the demand letter will vary by the type of case.
For example, if a plaintiff is injured in an accident and wants the insurance company to pay for their losses and injuries, they may begin the settlement process by writing a demand letter. In this case, the demand letter will present information about the accident and injuries sustained, a description of the medical treatment required, a list of all losses (e.g. medical expenses, wage losses), and a demand for payment.
After the insurance company receives the demand letter and the supporting documentation, they may review the case and respond with a settlement offer.
If the demand letter is written to collect a debt, the letter should include the terms of the loan, a demand for payment for the specific amount of money owed, and information about the next course of action that the creditor will take if the money is not paid.
While it is not necessary to write a demand letter prior to initiating any type of legal claim, writing a demand letter can notify another party that action will be taken if payment or restitution is not made.
After the recipient has received the demand letter, they will review the facts, causes, damages and issues outlined in the demand letter.
Frequently, receipt of a well-crafted demand letter will be sufficient for the other party to voluntarily resolve the issue. In other cases, however, the recipient will decide to risk litigation, which may force the other party to prove the allegations that they made in the demand letter in a court of law.