Have you ever done a job for someone and they haven’t paid you? It’s a frustrating situation, don’t you agree? Before heading to QCAT and filing a claim, sending a letter of demand can be a quicker and simpler way of having the matter settled and getting the money you’re owed.
In simple terms, a letter of demand is a formal written request for payment or action. It outlines the amount you’re owed, why you’re owed it, and what will happen if you don’t receive it within a specified time frame, usually 7 days.
As an example: if you are a plumber and had an agreement with a client to perform works costing $300 you would expect to be paid that $300 once you’d done the job satisfactorily.
Should you complete the job and the client not pay, a letter of demand could be sent. It would need to clearly state they owe you $300, because the work was done at an agreed price. You would also need to state that failure to pay within 7 days would result in you progressing the matter through QCAT.
Here’s why a letter of demand is a good idea:
Clearly lays out your claim: It spells out exactly what you are asking for and the legal reason you believe you deserve it.
Encourages a resolution: It lets the other person know you’re serious about getting what’s owed to you, but also opens the door for negotiation to avoid a court case.
Increases your chances of getting paid quickly: A well-written letter can prompt the other person to settle the debt without going to court, which saves everyone time and money.
Is a Letter of Demand Required by Law?
No, a letter of demand isn’t mandatory and issuing one isn’t required under either the Queensland Uniform Civil Procedure Rules or the Federal Court Rules.
However, it is strongly recommended. While, yes, you can take legal action without one, the letter can be a powerful tool for getting what’s owed to you faster and easier.
There are a few rare situations where a letter of demand might not be the best course of action, such as when there’s a need for secrecy or immediate action. For example, if you’re worried the other person might hide their assets overseas, you might need to take legal steps to freeze those assets before sending a letter.
How long should a Letter of Demand be?
The key to a good letter of demand is being clear, concise, and professional. Aim for 1-2 pages at most.
Understandable Language is Important
The letter should be written in plain English that both you and the recipient can understand. Avoid legal jargon and complex sentences. The goal is to get your message across clearly to facilitate prompt payment, not to impress with fancy legalese.
Your Letter of Demand Should Be Clear, Not Angry
A letter of demand should be firm but fair. Focus on the facts of the situation and the consequences of not complying, avoid insults or emotional language as these will be detrimental to your efforts.
Here are some examples to illustrate the difference between a poorly written and a well-written letter of demand:
Poorly Written Example:
“Your failure to pay for our client’s plumbing services is outrageous. We have never encountered this sort of behaviour in our decades of legal practice. Our client is well connected and will ensure that no other tradesperson performs any other work for you in the future. There is no basis in fact or law for your failure to pay and our client will take every step necessary and available to it to obtain the payment you agreed to make for his excellent services.”
A Much Better Example:
“There is no legal basis for your failure to pay. Our client’s work has been performed competently and without complaint from you. The price was agreed before the work was undertaken. If you fail to pay the demanded sum within seven days we expect our client will commence legal proceedings in the Queensland Magistrates Court without further reference to you. If that is required, our client will also be entitled to recover its legal costs plus interest, in addition to the principal amount.”
We Can Help With Your Letter of Demand
If you’re owed money and considering a letter of demand, the solicitors at Simpson Quinn Lawyers can help. We can draft a professional letter that outlines your claim and increases your chances of getting paid. Don’t hesitate to contact us for an obligation-free complimentary consultation to discuss your situation further.