What Is a Letter of Demand?


Quick Answer

A demand letter is a letter that states a legal claim making a demand for restitution or performance of an obligation owed to recipients for a breach of contract or legal wrong. These are also often referred to as a LOD, and they are typically drafted by lawyers.

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Full Answer

Letters of demand are very often used in personal injury claims, as the settlement process of these claims typically begin with the victim submitting a demand letter to the defendant?s insurance company. The demand letter serves the purpose of providing facts about the incident in an attempt to persuade the insurance company to give adequate compensation. The letter may also contain supplemental documents that provide additional details of the incident if proof is needed. The type of supplemental documents typically used include copies of accident reports, photographs of the accident and any injury reports, medical bills or doctor?s statements. After receiving these, the insurance company usually responds with a counter settlement offer.

These letters are also used sometimes for debt collection in the United States. All demand letters used for this purpose must comply with the Fair Debt Collection Practices Act. In certain places like Canada, a demand letter is mandatory for certain types of cases, and without one, a person is very likely to lose their case.

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