How to write a demand letter

One of the most effective tools in the lawyer’s kit is the ability to write a firm, persuasive demand letter. Its purpose is simple. Someone has wronged their client, and the letter sets out the problem and how the other party can make things right. (Often it’s paying a sum of money by a certain date.) This approach can be very effective at getting a swift resolution and heading off a long and expensive court process. Here, we walk you through the steps to write a demand letter yourself.

What you should know

"I bought a new dishwasher, which came with a warranty. After about six months, it stopped working well, and one day it started a fire in my kitchen! Fortunately nobody was hurt, but my apartment was completely wrecked. The dishwasher company only offered to give me a new unit and a few hundred dollars to cover other costs. I rejected their offer — I had new clothes to buy, counters to fix, not to mention the cost to get rid of the smell. In a letter, I came back to them with a much higher number plus proof of all of my costs. I didn’t get everything, but we settled on something in between. And I didn’t have to hire a lawyer and go to court! I’d call it a win."

– Devin, New Westminster, BC

Before you put fingertips to keyboard, do a gut check. Think about what happened, and whether a letter is an appropriate response. Here are some everyday legal problems where a demand letter fits.

You bought a product that doesn’t work, and the store’s refusing to give you a refund.
You’ve moved out of a rental unit, and the landlord refuses to repay the damage deposit.
You were laid off from your job, and they refuse to pay you proper severance.
You lent somebody money, and they haven’t paid it back on time.
A neighbour makes noise many nights after 11 pm, and you want them to stop.

What’s the common thread? Someone has done you harm in a way that is clear and quantifiable. If the harm is vague, or the situation is really open to interpretation, it’ll be tough to convince the other side that they need to act.

But clear harm is just one part of it. A good claim should also have solid legal backup (like a written contract), and some proof that the other side did (or didn’t do) something that directly resulted in you losing out. Check out our page on contracts for more details on what makes up a legally binding agreement.

You might believe you’re owed more than payback for the quantifiable harm. What about your lost time, lost business opportunities, the “pain and suffering” you endured? These kinds of claims can be a hard sell. It may prompt eye rolling if you assert that your anguish over failing to get a prompt refund for that computer is worth thousands of dollars. And while courts do allow these kinds of indirect damages, it’s for very rare circumstances.

Remember though, you’re not dealing with a judge. A demand letter is often just the start of a negotiation between two sides. Any court cases you may have read that are similar to your situation don’t quite apply when you’re trying to resolve things out of court.

Sure, you can mention case law in your demand letter, but it might not be convincing. The more reasonable the demand, the more “direct” the resulting loss was, the more likely the other side is to take it seriously. And the more likely you’ll be on your way to getting it resolved.

You believe you’ve been harmed. That’s a start. But you won’t get far unless you have something (or several things) documented that show it. This could be:

A sales receipt, along with a store's online policies for returns or warranties.
A contract between you and your landlord/borrower/employer/etc.
Emails with details on what was expected to happen.
Sound recordings or photos.

A binding contract doesn’t have to be a long “legal” document. You just need the essential elements — an agreement, both sides’ intention to be bound by it, and an exchange of value. A contract can be made orally, or in an email, or on a napkin. Ideally you’d have a copy of something written, as that makes the contract easier to prove. Again, our page on contracts is a great resource for more details.

Without some kind of “proof,” your demand letter might come off as an empty threat.

Trying to settle a debt for something that’s been owed for many years? That won’t be easy. In BC, the general limitation period for starting a claim is two years from discovering it. That means, for example, from the moment you knew your dishwasher was broken, you’d have two years to sue them. Some areas of the law have different limitation periods, though. Here’s more on how limitation periods work.

Also, your product or service may have come with some kind of “extended warranty,” which may be less than two years. Those might be offered by the seller or service provider under your contract, but they’re not mandatory.

"When my ex-boss only offered me four weeks of severance, I knew I was entitled to more. So I wrote them a very tough letter demanding better compensation. I included a lot of detail about the awful things my HR manager had done to me, and threatened to sue them for everything. They responded with a formal lawsuit, threatening to sue me! So I hired a lawyer to look at it. She told me that I made some mistakes in my demand letter that might hurt my chances of winning my case."

– Jason, Kelowna, BC

There’s no doubt you can write a good demand letter on your own. But sometimes it’s wise to get a professional involved. Ask yourself:

Is there a lot of money on the line?
Is the other side a big company? Big companies get a lot of demand letters and often have lawyers on staff.
Is getting this resolved absolutely essential to your well-being?

If the stakes are high, a mistake on your part (like saying the wrong thing in your demand letter) could hurt your claim’s success. Lawyers write demand letters for a living; getting their help could make all the difference, even if you have to pay for it.

If you do plan to use a lawyer, get clear on the costs up front. Have them give you a quote to prepare the initial demand letter and a possible counteroffer response.

Some lawyers will offer to take on an entire case for a contingency fee. But that doesn’t mean they’ll work completely for free, even if you do win. Make sure you understand what fees you’ll have to pay along the way (like court filing fees or other non-legal costs).

Work out the problem

First, get it out of your head and into writing. Try to summarize the problem in a few paragraphs or bullet points. (We’ve got a helpful template for that here). Read and re-read what you’ve written. Make sure it captures:

what happened (the facts)
when it happened
who else is involved (as in, who can back up your story)
what proof you have (emails, letters, voice recordings, pictures, etc.)
what you’ve lost or are trying to get back

The key to a good demand letter is to be concise, clear and very direct.

Consider writing “WITHOUT PREJUDICE” at the top of the letter. This is legalese for “no matter what I say here, it doesn’t mean I’ve agreed to anything, I can still change my mind.” It’s recommended in situations where you still might feel like you’re entitled to more, but you’re asking for less to get things resolved sooner.
Start to mold your thoughts into short paragraphs. Often the less you say the better. You don’t want to be in a situation where you offer too much information or interpretation in writing — the other side could pounce on that later on. Keep it brief and punchy.
Don’t spend paragraphs reiterating how much pain and suffering this has caused you. It’s tempting to want to tell your whole story. But in a demand letter, it’s best to keep things focussed on the objective consequences of the other side’s actions.
Make it very clear what you’re asking for. If it doesn’t seem clear to you after you re-read it, it won’t be clear to the other side either.
Include copies of your proof. A threat without any backup won’t have teeth.
Give a time frame for a response. Usually 10 working days is reasonable.
Say what you will do next if they don’t respond in time. For example, you might say that your next step will be to take more formal legal action.
Sleep on it. Give your letter time to simmer. Review it over a strong cup of coffee. Make sure there are no typos. And make sure you’re getting your point across clearly.

Don’t be disappointed if the other side doesn’t just mail you a check. It’s just as likely your letter will either be ignored or you’ll get a written response back.

If you get a written response, some of the content on our page on what to do if you get a legal letter might be helpful.

You might need to write another letter. If they continue to ignore you, the next step might be to go to court. Check out step 5 of our page on solving legal problems to understand what that might look like.

They might send you documents to sign

Often a counteroffer comes with strings attached. Sometimes they’ll ask you to sign a release. Releases tend to contain a lot of legalese, but their main goal is to prevent you from asking for more in the future.

Be careful here. If the situation is complex, or if you think you’re owed a lot of money, it might be a good idea to have a lawyer review the release before you sign it.