Contract Glossary
Demand Letter
Definition
A formal written notice sent to someone who owes you money or has breached a contract, demanding they fix the problem within a specific timeframe. It's the 'pay up or I'm taking legal action' letter, usually the last step before a lawsuit.
In Practice
A client owes you $8,000 for completed work and has ignored your invoices for 60 days. You send a demand letter giving them 15 days to pay, explaining that you'll pursue legal action if they don't. About 30-40% of demand letters result in payment without ever going to court. They work because they signal you're serious.
Common in these contract types
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