At one point or another, and hopefully later rather than sooner, someone will wrong your business – maybe a customer didn’t pay or supplier didn’t deliver what was agreed upon – such that you are contemplating taking them to court . However, before instituting legal proceedings, people generally send a demand letter. A demand letter explains your grievance, makes a demand to remedy the situation and threatens legal proceedings in the event of noncompliance.

Although your demand letter is addressed to its recipient, write it thinking that will be read by the judge presiding over your case as well as the recipient’s lawyer. Keep the letter brief and to the point, normally no longer than a page or two, and avoid floury language.

Addressee

Make sure you address your demand letter to the right legal entity. If you are dealing with a business, address the letter to the business itself to the attention of a director or officer. To find the business’s legal name, search your provincial business registry (e.g. the Quebec Business Registry) as well as Corporations Canada’s Federal Business Registry to validate the business’s official name, directors and the address of its head office. Generally, a company’s official business name ends with “inc.” (“corp.” and “limited” are two other common options.)

Without Prejudice

Write “Without Prejudice” at the top of your demand letter. In theory, this means that the contents of your demand letter cannot be used against you or your business. However, this is often disregarded by Canadian courts, so be mindful of its limited legal weight. Accordingly, try to avoid admissions in your demand letter. When in doubt, don’t include the admission or rephrase it to make it less incriminating.

Facts

Your goal is to provide a clear set of facts which allows for the demand letter (and its enclosures) to stand on its own. This means that you need to provide sufficient back story for the reader to understand what you are talking about. Remember, you are writing it for a judge who does not know all of the facts.

A good approach is to tell the story in chronological order referring to the relevant dates, people, contracts and occurrences.

Demand

Your letter needs to include clear demands which flow directly from the facts listed earlier. A strict deadline for compliance must also be indicated. A good rule of thumb is to give the recipient 10 to 15 days from the receipt of your letter to comply with your demands. After mentioning that deadline, indicate that failing compliance, legal proceedings will be instituted without any further notice or delay.

In court proceedings, interest generally runs from the expiry of the grace period from compliance provided for in your demand letter. As an aside, your business’ contracts should always stipulate the interest rate applicable to all overdue accounts. 12% or 18% interest per year is fairly standard in that regard. Don’t forget that the Interest Act (Canada) stipulates that interest must be indicated on an annual basis (as opposed on a monthly or weekly basis) in order for it to be enforceable, otherwise it is reduced to 5% per year. A good workaround is to write the monthly interest rate followed by the equivalent annual rate in brackets (e.g. 1.5% per month (18% per year)).

Closing

Demand letters often end with the closing “DO GOVERN YOURSELF ACCORDINGLY” (or “YOURSELVES” if there are multiple recipients.) This adds some solemnity to the demands being made. Your signature block should clearly indicate the business on behalf of which you are acting.

Delivery

Pick a delivery method which provides proof of receipt and will lead to your letter being taken seriously. Lawyers often use bailiffs to send their demand letters as having an officer of the court physically show up at someone’s door shows the seriousness of the demands being made. Registered mail with signature and tracking is another common delivery option. If there is urgency to your demands, email is likely your best bet.

Letter Design

Don’t underestimate the impact of clean formatting and typography on your letter. Matthew Butterick in Typography for Lawyers describes at length strategies to ensure clean and direct page layout, and simple readable design.

You also want to avoid starting your demand letter too low down on the page, so compress your header as needed. Your font choice should be conservative with Times New Roman, Garamond or Century Schoolbook being some classics Windows pre-installed fonts. If you’re going beyond system fonts, Adobe Garamond Pro is one of my personal favourites.

Even if your demand letter is being sent by email, prepare an actual letter and then attach it to the email itself. If your demand letter is being sent by registered mail or by bailiff, print it out on heavyweight paper as this will add further to the letter’s appearance.

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Lastly, consider consulting a lawyer to draft your demand letter. Lawyers have more experience preparing demand letters and will be able to turn your letter around quickly. The threat of legal proceeding is also much more real, and thereby the desire for compliance is much greater, when the demand letter emanates from a lawyer’s office. In addition, a lawyer will help you assess the merits of your claim and the damages to be sought. Alternatively, you can always ask a lawyer to take a look at the letter which you already drafted to let you know if it appears to be all right. Best of luck can feel free to reach out if you want any assistance.