Which Steps I should Take After Receiving a Demand Letter?

By The Law Office of Yoel Molina.
 
A demand letter is a first-step strategy used by people and organizations to try and persuade another party to do something, typically in exchange for payment. In the event that you receive a demand letter from an adverse party, the advice in this article will help you know what steps to follow.
 
Don't Ignore It:
If you don't respond to a demand letter in a timely manner, you could find yourself in trouble or your company could suffer. The majority of demand letters will state that you must send a written answer within a specific timeframe (the response deadline) or the sender (the obligee) may contemplate initiating legal action against you. Despite the fact that you are typically not required by law to respond before the response deadline (or at all), the time period mentioned can help you determine how keen the obligee is to continue with the adversarial process. In most cases, ignoring a demand letter—especially if you don't even read it—leaves the obligee with little alternative but to file a formal lawsuit against you or your company, possibly even sooner than they would have otherwise. There may not be much you can do to stop the process once the obligee has spent money on retaining counsel and submitting a formal complaint. Additionally, the obligee will have the chance to convince the fact-finder during the future legal procedure that they made good faith efforts to address the matter with you but were rebuffed.

Demand letters may come unexpectedly or expectedly. Your determination and openness to address the issues raised in the letter will be influenced by both your gut response and how seriously you take the underlying argument. Whatever your perspective on the disagreement, you must sufficiently control your emotions so that you can easily resolve the problem. You might even find that the other party's demands are more reasonable than you initially thought by merely reading the letter (rather than tossing it aside or throwing it away). This would present you with the chance to avoid needless conflict by quickly resolving the unresolved issues.
 
Evaluate the Relevance of the Arguments:
After reading the demand letter in its entirety, evaluate the obligee's arguments honestly, taking into account any sums of money you might rightfully owe them. Also, record any inconsistencies you find in the obligee's narration of the supporting facts. You should also total up any deductions or counterclaims that you believe you have a legitimate basis to make against the obligee.
 
Recognize the objectives of the obligee:
Every demand letter is sent out with a different set of goals and expectations. Although the majority of demand letters utilize dramatic language to compel compliance (by threatening litigation), this is frequently a bluff designed to pressure you into making a settlement, even if it's for far less than what the demand letter is asking for. This may be the case, in particular if the obligee thinks you lack competent counsel, lack legal knowledge, or are unlikely to successfully refute the validity of their claims. Simply put, the obligee may believe that mailing a curt demand letter is the quickest and most cost-effective approach to get what they want rather than nothing at all.
 
Determine if you require legal representation:
If you already have legal representation, you should probably ask them to address the opposing counsel on your behalf. If you can negotiate a small, one-time legal fee, you might still think about hiring an attorney if you don't already have one for the express purpose of replying to the demand letter. Using a lawyer gives your response letter more credibility and guarantees that it is drafted with appropriate legal terminology and reasons.
 
Respond in a formal, factual, and expert manner:
Make sure to provide the response letter by the deadline if you decide to draft it yourself (rather than having an attorney do so). Your response letter should be formal, informative, and printed on letterhead from your business. You'll have to decide how forcefully you want to answer based on the merits of the allegation, your resources, and your particular position; nonetheless, you should only use as much harsh language as is absolutely required to make your points. Always keep in mind that the obligee is partly trying to get a written response from you so they can potentially use it against you in court. If the obligee can show that your return letter was just an angry tirade without any convincing justification, it will probably taint the start of your case. Additionally, you only have one chance to create a good first impression on the judge (or anyone else, really).
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Additionally, bear in mind that lawyers frequently compose these letters for their clients only for financial gain, without fully comprehending the specifics of the underlying background. It's feasible that the obligee's legal counsel could persuade their client to either leave the case entirely or adopt a more conciliatory position based on your factual, thoughtful, and attentive response to the demand letter.
 
Obtain confirmation of receipt:
Make sure to send your answer letter to the obligee's lawyer through email as well as a postal service that enables you to trace and confirm delivery. You should have proof that your response letter was received and sent in some way. In case you need to produce it in connection with a subsequent proceeding, store this material in a secure location.

 
If you have any questions about this article or similar matters, please contact our office, the Law Office of Yoel Molina, P.A., at fd@molawoffice.com or 305-548-5020, option 1