Most business owners have been in this situation.  You provide the goods or services, issue your invoice and the invoice due date slowly passes without payment.  Sometimes, despite numerous requests for payment of your invoice, it simply remains unpaid.  So what do you do now?

If payment of your invoice remains outstanding despite your commercial attempts to resolve the matter, we recommend issuing a letter of demand.

What is a Letter of Demand?

A letter of demand is a letter you send to customers who have not paid an invoice by a due date.  A letter of demand should include:

  • the amount due;
  • the legal basis for that amount being due;
  • a final date for payment of the amount due (i.e. 7 – 14 days); and
  • the relevant supporting documents.  This includes a copy of your terms of sale, your outstanding tax invoice and copies of any contracts you may have with the customer.

If the customer fails to pay the amount claimed in the letter of demand by the due date, you can then use the letter of demand as evidence in the court proceedings to support your claim.

Do I Need to Issue a Letter of Demand?

Generally speaking, you may commence legal proceedings against a debtor concerning a debt once the tax invoice becomes overdue.  There is no legal requirement to send a letter of demand to a debtor before commencing legal proceedings.   In saying this, when you or your lawyer send a letter of demand, it sends a clear message to the debtor that you are serious about the recovery of your debt. It also puts the other party on notice about the threat of legal action.

The court looks unfavourably on a debtor ignoring a letter of demand in the event you commence legal proceedings. Sometimes, simply issuing the letter of demand is enough to result in the debtor quickly paying the debt and ultimately, may avoid you having to incur further costs in commencing legal proceedings.

What are the benefits of issuing a letter of demand?

The benefits of issuing a letter of demand to a debtor include: 

  • Placing pressure on debtors to pay the debt while avoiding the expense of litigation;
  • Providing a further opportunity for the debtor to make payment of the debt;
  • Providing the debtor notice that you will commence legal proceedings if the debtor fails to comply with the letter of demand; 
  • Using the letter of demand to support your claim if you choose to initiate litigation; 
  • Courts look unfavourably on commencing legal proceedings where the debtor has failed to comply with the letter of demand;
  • Assisting you in an application for costs if you serve the demand and the debtor ignores it; 
  • Providing evidence to the court that you did try to settle the matter before commencing legal proceedings.


If you are owed money and require assistance with issuing a letter of demand, LegalVision has an experienced team of debt recovery lawyers able to assist you.  LegalVision can also provide you with a fixed-fee quote so that you have certainty moving forward.  Questions? Please get in touch on 1300 544 755. 

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at

View Privacy Policy