Have you entered into a contract with another party? Has this other party breached the contract? Have you lost money or suffered some kind of disadvantage because of this?

If you find yourself answering “yes” to these questions then sending a letter of demand is what you need. A letter of demand is a document that sets out your legal claim against the breaching party. It will set out your legal rights and will allow you to seek compensation or a refund or demand performance of an obligation for any breach of contract that this other party has committed at your expense. In this letter you can also put forward a time limit within which the other party must comply with your requests or else risk having matters taken to court.

While letters of demand can be quite informal documents, the most effective letters have a good structure and legal argument that can help you get your point across to the other party.

Introduction

At the beginning of your letter you should first address the relevant person to whom this letter applies. Also state what this letter is about eg. “This letter refers to the installation of the washing machine on [date]”.

The contract

You should then briefly summarise the relevant terms of the contract that were entered into between you and the other party. It is best to be as specific as possible so include dates, times, names of individuals and any receipts or invoices that are relevant. Sometimes tabulating this information is easy to structure in a coherent and comprehensible way for the other party to understand.

In this section it is important that you list all the terms of the contract that you complied with and the obligations that you performed. It should be clear to the other party that you have relied on the contract and have done your bit to uphold your obligations. If you are seeking a refund or compensation for money, make sure that you include details of any receipts or invoices here as well.

Breach of contract

Before detailing how the other party breached the contract, you should set out the applicable law under which this breach has occurred. You can rely upon general contract law or the Australian Consumer Law or specific legislation that applies to your matter. In looking at the obligations that the other party had to uphold under the law you can then list how the other party has breached these obligations. In proving these breaches you describe how the other party has breached the contract as examples. Again, being specific is important so include as many details regarding the breach(es) as possible. It may also be useful to tabulate this information if a variety of different breaches occurred on different dates and times.

For example, you may have hired an electrician to install a washing machine into your house. The electrician installed the washing machine, took the necessary payment from you and left. Soon after, the washing machine began to leak and when you called the electrician to come back and fix the problem he/she refused. You may refer to the electrician’s obligations as a service provider under the Australian Consumer Law to uphold certain consumer guarantees. You could state that a service provider guarantees that his/her service is provided with due care and skill. To prove that the electrician has breached this guarantee, you could state that the washing machine began to leak after installation as an example of this breach.

If you had at any point attempted to negotiate the breaches with the other party in order to come to some sort of resolution, make note of this here. It is important for the other party (and the court) to recognise that you have made the necessary efforts to resolve the breaches before sending this letter of demand.

Damages suffered

In this section you should list all the ways in which you were affected by the other party’s breach of contract. There are a variety of ways in which you could have suffered from this breach which are unique to your circumstances.  You could have:

  • lost money in paying for services that weren’t adequately provided to you
  • lost income in being unable to work because of this breach eg. A mechanic damaged your car engine making you unable to use your car for professional delivery services
  • lost money in hiring someone else to fix the faults that the other party made

Demand for compensation, refund or performance of obligation

In this section you should clearly list exactly how you would like the other party to rectify the damages that they have caused to you by their breach of contract. It is a good idea to check the legislation under which the breach of contract arises to see what remedies are available to you.

It is crucial to note that you must be able to provide evidence of any money paid or owed if you are seeking a refund or monetary compensation.  For example, if you are seeking a refund of monies paid you must be able to provide a receipt as evidence of money that you have paid. On the other hand, if you are seeking compensation for services given, you should be able to provide an invoice as evidence that money is owing to you from another party.

Taking matters to court

We recommend sending letters of demand via email and post to the other party to make sure that they will receive your letter. Sometimes people do not check their emails or may movie residences often so it is useful to cover all of your options to make sure that your letter is received by the other party.

However, whether the other party reads your letter of demand and recognises its content is out of your control. It is useful to have a section in your letter stating that this letter constitutes written notice of your intention to take this matter to court if the other party does not comply with your demands within a specific time frame. This statement will prevent you from having to wait for a response from the other party indicating that they have read your letter. Giving the other party notice that this matter may be taken to court is also a legal requirement so including this statement in your letter satisfies a dual purpose.

Conclusion

Writing a good letter of demand is important since it contains legal claims that may come before a court if the matter advances to this stage. Keeping this in mind, it may be in your best interests to seek legal advice before sending a letter of demand especially if it deals with a more complicated contractual agreement.

 

Lachlan McKnight

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