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Demand Letters

A plumber repaired the pipes in your bathroom for a couple hundred dollars, but they're still leaking quite a bit. You've asked the plumber on several occasions to return to fix the problem at his own expense, but he hasn't done a thing! What are your options? In situations like this, a demand letter may sometimes be enough to motivate the plumber to get the job done.

In this Infosheet, Éducaloi explains what a demand letter is, when it is appropriate to send one, and what it must contain.

What is a demand letter?

A demand letter is a formal letter. Many people think of it as a lawyer’s letter although anyone can write a demand letter. Its purpose is to convince another person to either do or to stop doing something within a certain period.

For example, let’s say that a seller agreed to deliver and install your new kitchen cabinets. One month later, you still haven’t heard from her. You can write her a letter reminding her of the contract that she signed with you and giving her 10 days to deliver and install your cabinets. This letter is a demand letter.

A demand letter is a final warning- a last chance given to someone before taking further action- imposing something on her. For example, you can tell her that if she doesn’t do what she is supposed to do or pay what she is supposed to pay, you will take her to court. If the person wants to resolve the dispute, great! Otherwise, the person knows what to expect.

A demand letter is not a judgment, even if it was written by a lawyer. The person receiving it is not forced to do what you asked for, if she disagrees with you.

When and why should I send a demand letter?

First, keep in mind that writing and sending a demand letter usually doesn’t cost much. You can do it yourself or hire a lawyer to do it for you, if the sum at risk is important enough.

A demand letter should be sent for several reasons before starting a lawsuit:

• A demand letter is sometimes required by law. If a demand letter is required by the law and you don't send one, there is a risk that your claim will be rejected by the court and that the judge will order you to pay the court costs. For example, if you want your neighbor to pay half of the costs to establish the boundaries of your respective lands, the law says that you must send him a letter asking him to agree to that and to the choice of a land surveyor.
  
  
• You may lose your right to claim the court costs if you sued someone without having sent her a demand letter first. Suppose, you bought a new house only to discover that the roof leaks. You immediately sue the person who sold it to you. That person decides to fix your roof. Unfortunately, since you didn't advise him of the problem by sending him a notice (demand letter) before suing him, you are stuck paying the court costs.
  
  
• The date on which the demand letter was delivered is often used as the starting point for calculating interest. For example, you sue your neighbour for $ 4,000. You win in court 18 months later. The judgment will also order your neighbour to pay you interest on that $4,000. The interest can start running from the moment the demand letter was delivered to your neighbour.
  
  
• Never forget that a demand letter allows the other person to settle the matter with you, without ever having to go to court.

Are there matters for which I do not have to send a demand letter ?

Yes. There are cases where you do not have to send a demand letter. For example:

1. Emergency cases. Sometimes a person must act extremely quickly without the benefit of a demand letter. For example, you may need to go to court right away if:

• a person who already refused to pay you what she owes you starts making her property “disappear” to prevent it from being seized;
  
• An ex-employee is about to give all the names of your clients to your main competitor;
  
• A hospital employee wants to give you treatment against your will.

2. Certain contract cases. In some contracts, there are clauses that say that a demand letter isn't necessary if one of the parties to the contract does not respect certain commitments that she took under the contract.

3. Other cases specifically mentioned in the law.

Remember that if you do not send a demand letter to your counterpart, you must prove to the Court that you fall under a situation where you didn’t have to send him a demand letter.

Let’s consider a practical example:

You are late in repaying a loan. Your lender can sue you without sending you a demand letter if:

• your contract says that any delay in repaying the loan would automatically put you in default; or
  
• you are late in paying several instalments on your loan. This is one of the cases specifically mentioned in the law where the person who wants to sue doesn’t need to send a demand letter beforehand.

If your lender decides not to send you a demand letter because of the clause in your contract, he must specifically point this clause out to the judge to explain his decision.

Remember that there can be serious consequences if you didn’t send a demand letter when you were supposed to. See the question: “When and why should I send a demand letter?”

Am I forced to sue the person that I sent the demand letter to?

You are never forced to sue the person that you sent a demand letter to. If that person refuses to resolve the issue between you, it is completely up to you to decide whether or not to sue her.

Is there a time limit for sending a demand letter?

The right question to ask is “How much time do I have to sue this person?”. There is generally a deadline- called "prescription". Once this deadline has passed, a court can reject your claim. Filing a court claim is the only sure way of avoiding prescription. Since the demand letter comes before the court claim, it must be delivered before the deadline for filing the court claim has passed.

But that’s not all. Sometimes, the law tells you that in order not to lose your rights, you must quickly give the other person written notice of your situation, even before filing the court claim. This notice often takes the form of a demand letter.

Time limits set by the law vary considerably. For example:

• You bought a new house, all the drains are plugged and there was no way for you to know that? You have a couple of months from the time that you discovered the defect to send a notice to the seller advising him of your situation.
  
• You have 10 years to deposit a court claim against your neighbour who is constantly acting like the owner of a piece of your land.
  
• After 10 days have passed, you no longer have the right to cancel the contract that you made with the door-to-door window seller if you didn’t send him a written notice to that effect.
  
• The time limit for suing a newspaper or a city is also very short.

As you can see, it is better to act quickly so as not to act too late!

By acting quickly, you also give the other person time to settle the dispute with you in a friendly manner.

Be careful! If your demand letter goes unanswered or leads to negotiations that do not result in a settlement, time will continue to run. A demand letter does not stop the time, for you to start a court case, from running out. If you let the time limit pass for taking your lawsuit, your claim can be dismissed.

If I send a demand letter, won't I make things worse?

Many people avoid asking officially for what they are owed because they are scared that the other person will react badly. After all, this type of letter isn’t usually one that people like to receive.

A seller will often call his client two or three times before running the risk of offending him.

If your neighbour’s new sound system is keeping your baby up, you will normally broach the subject with him personally before taking the matter any further.

However, when the delays are tight and talking is getting you nowhere, you need to show how serious you really are. That’s one of the goals of writing a demand letter.

Here are a few simple tricks to avoid making things worse:

• Be polite. Avoid insulting the other person. Don’t pretend that you know what she is thinking. Let’s say that the transmission in your car is not working after you had it fixed. Accusing your mechanic of being “completely incompetent” in a letter won’t necessarily make things move forward in the way that you want them to.
  
• Stick to the facts. Avoid assumptions. This will ensure that you don’t make false statements for which you can be held liable. Also, remember that such statements can destroy your credibility before a judge, if it ever gets that far.
  
• Be reasonable. Make sure that your requests are justifiable. For example, if your travel agent sold you an airline ticket for a seat that was already sold to another passenger, make sure to claim for the real inconveniences that you went through to catch another flight. If instead, you leap at the chance by attempting to claim $100,000.00 or a free one month long dream vacation, your travel agent probably won’t take your requests very seriously. Again, remember that this can later affect your credibility before a judge.
  
• Don't claim less than what you are owed. If you underestimate your claim, you may get stuck with exactly what you asked for in your demand letter or with having to explain to a judge why the value of your claim suddenly went up. Once you write that your car is worth $3,000, it becomes very difficult to later argue that it is really worth $6,000.
  
• Don’t make illegal threats. Telling the other person that you will sue them is a perfectly acceptable legal threat. In fact, that’s exactly what most demand letters say. If you are a landlord and you tell your tenant that if he doesn’t pay up, you will report him to immigration and get him deported, you would be making an illegal threat.
  
• Maintain an open line of communication once your demand letter has been sent. The demand letter must be understandable and clearly indicate what you think you are entitled to. Once it is received, it may be in your interest to look for the best possible solution with your counterpart. To do that, you have to be ready to talk about it. For example, the person who owes you money may admit that you are right but may not have the means to pay you. Are you better off in that case to negotiate ways in which she can repay you? Maybe.

Finally, no matter what you are asking for, you should reread the demand letter that you wrote several times before sending it out. You don’t want to say things that you will regret later on. Remember that this demand letter may become part of the court’s file one day and that a judge might read it.

Can I write a demand letter on my own?

Yes. You can write a demand letter on your own or hire a lawyer to do it for you. A lawyer’s letter generally makes a stronger impression on the person receiving it. The lawyer could also make sure that you are within your time limit to claim what you are owed and help you to determine what you can claim.

Having a demand letter written by a lawyer can save you the trouble of saying too much or too little.

Be careful! The demand letter must be worded very carefully. Remember that writings tend to stay around for a very long time and what you admit in your demand letter can be used against you later on. For example, you fall down a flight of stairs because the snow on it wasn’t properly removed. If you claim in your demand letter that the staircase was “clearly dangerous”, chances are that you will be asked why you decided to use it!

What does a demand letter look like and what kind of information should it contain?

Ideally, a demand letter should:

• be in letter form (date, recipient’s address, sender’s address, signature);
  
• include the words “DEMAND LETTER” somewhere at the top of the page so that the other person knows exactly what it is;
  
• include the sentence “WITHOUT PREJUDICE” at the top of the page. This sentence is used by lawyers to indicate the confidential character of the letter;
  
• clearly state what you ultimately want;
  
• explain why you believe that you are entitled to what you are asking for. Remind the other person, for example, of the contract that you signed together;
  
• give the other person a reasonable time period in which to comply;
  
• state what will happen if you don’t get what you asked for. For example, you will not pay the $100.00 that you would have had to pay otherwise or you will stop doing something that you would have done otherwise. This is a good time to mention that you will take the other person to court if she doesn’t comply with your demand;

To see what a demand letter can look like, consult “How to prepare  (http://www.educaloi.qc.ca/en/cotecour/court_quebec/small_claims_division/preparation/)” in Côtécour, Court of Quebec - Small Claims Division.

How should I send the demand letter?

Remember that the important thing is not so much how you send your demand letter but being able to prove that it was received. That’s why people often use registered mail to send their demand letters. They can prove that it was received with the delivery confirmation provided by the post office.

Having the demand letter delivered by bailiff is the most reliable way to send it. The bailiff will prepare a certificate of service in which he notes when and with whom the document was left. The certificate of service proves that the person received it.

If you decide to have your demand letter delivered by bailiff, be sure to ask him for an estimate of the cost of delivery before you hire him. Costs vary a lot depending on the distance that the bailiff will have to travel to deliver your letter.

For further information about bailiffs, consult our Infosheet entitled Seizures, certified reports, service... the work of bailiffs  (http://www.educaloi.qc.ca/en/loi/other_infosheets/408/).

What can I do if someone sends me a demand letter?

You have several options. You can:

• agree to do what the demand letter asks for (example: pay a sum of money, do the thing that’s asked for or stop doing what the person is complaining about);
  
• contact the author of the demand letter or his lawyer to negotiate a lesser sum of money than what is claimed or a different solution than the one put forward in the demand letter;
  
• do nothing. Wait and see if the author of the demand letter will actually sue you. However, if you chose this option, it may be a good idea to write down your own version of the facts while they are still fresh in your mind and to start collecting things to prove your point, if it comes to that.

Of course, if you wish to seek advice from a specialist in the field, it is a good time to do so. Lawyers and notaries immediately spring to mind but they are not the only ones that can offer you some guidance. For example, if it has something to do with your work conditions, you may also want to consult your union representative.

You should also contact your insurance provider. Often, insurance policies, especially home insurance policies, provide that you can be compensated if you are found responsible for the damages that occurred. All of these policies require that you give notice to your insurer as soon as you are aware of the problem. Awareness can occur a long time before receiving the demand letter. Once you receive a demand letter though, you are definitely aware of the problem.

Please note that the insurer will often pay for your lawyer fees, in whole or in part. For more information about insurance policies, consult our Infosheet entitled Insurance  (http://www.educaloi.qc.ca/en/loi/consumers/422/).

Useful Links :

1. Office de la protection du consommateur website  [http://www.opc.gouv.qc.ca/]