Advice for when you receive a demand letter
April 5, 2017
An attorney often will not file a lawsuit without first sending a letter to the potential defendant demanding action, such as payment. Because attorneys often do not know if a potential defendant has an attorney, such demand letters are often directed to the potential defendant as a lay person. Here's advice for when an attorney sends such a demand letter.
First: Relax. It's been said that attorneys charge for selling fancy letterhead. This means that a letter from an attorney is often more impactful than the same letter would be coming from a non-attorney because it carries with it at least the implied threat of a lawsuit. A lay person who receives such a letter may justifiably feel threatened. Just relax. If the attorney was going to file a lawsuit right away, the attorney would have done so. It is important to calmly consider your response.
Second: Don't be overly concerned about any arbitrary deadlines stated in the letter. Demand letters will often demand that action occur by a certain date. Why do attorneys do this? One reason is that an attorney needs to set a date by which to file a lawsuit or take some other action or else they could sit there indefinitely not knowing whether to expect a response. Another reason is that people naturally feel inclined to respond to deadlines. However, you don't have to do something by a certain date just because an attorney says so. The deadline should be considered, but you shouldn't be overly concerned with it. If an attorney demands that you pay $500 within three days and you're not going to pay because you don't feel the claim is justified, then the three-day deadline makes no difference. Educate yourself about the type of claim and how long the action demanded in the letter would take to achieve in the legal system. Unless a statute or contract gives a deadline significance, a deadline stated in a demand letter may create a false sense of urgency.
Third: Consider obtaining legal advice. If the matter was important enough that the other side hired an attorney to send the letter, then you will probably benefit from legal advice if you can afford it regarding your response. If you can't afford a private attorney, consider seeking out other resources that provide legal aid.
Relax, take arbitrary deadlines with a grain of salt, consider obtaining legal advice and don’t worry if the letter has the facts wrong. You now have an opportunity to craft an appropriate response.
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Fourth: Don't be overly concerned if the letter doesn't have the facts right. In the legal field, a potential client walks in the door and tells the attorney a story. The attorney usually does what she can to investigate the story, such as throughly reviewing documents or talking to witnesses. (Most attorneys are not foolish enough to take at face value everything a new client tells them.) However, the matter may be complicated or not susceptible to verification. One reason that attorneys send demand letters is that, even if the recipient doesn't accede to the demand, the response may be enlightening. This allows the attorney who sent the letter to better assess the situation before filing any lawsuit. It's natural to be upset if a demand letter misstates facts or doesn't consider pertinent information, but this creates an opportunity for you to set the matter straight. The attorney who sent the letter will probably appreciate learning more about the matter from your perspective.
In sum, a letter from an attorney should be taken seriously, but not too seriously. Relax, take arbitrary deadlines with a grain of salt, consider obtaining legal advice and don't worry if the letter has the facts wrong. You now have an opportunity to craft an appropriate response.
Noah Klug is owner of The Klug Law Firm, LLC, in Summit County, Colorado. He may be reached at 970-468-4953 or Noah@TheKlugLawFirm.com.