Every area of civil law has its own reasons why lawyers recommend taking certain steps before ever filing a lawsuit in court.
What most people hear about is the negotiation side of things—the idea of talking it out or trying to reach a resolution before beginning the costly process of litigation. Sometimes, a dispute simply needs someone to act as the wall between two fighting parties, keeping them separated while a deal is worked out.
Civil disputes are centered around two sides that disagree. Usually, the bad blood is more dramatic than a Taylor Swift music video, except it does not end after three minutes.
So, lawyers often say: You have a problem. The other side is not agreeing with you. Let us see whether we can talk to them first.
Thus, the demand letter enters the picture.
The basic idea is simple: send the other side a formal notice, explain the problem, and see whether they will open the door to a conversation that could end the dispute before a lawsuit becomes necessary.
Of course, it does not always work.
Everyone reacts differently when a lawyer becomes involved, and sometimes sending a demand letter is like pouring fuel on the fire. One side says, “I bought a revolver.” The other side shows up with a shotgun. Then someone gets a bazooka, the other side gets a tank, and the next thing you know, everyone has escalated into a full-scale war involving a significant diversion of money, time, and resources.
Other times, sending a demand letter is like agreeing to meet someone at the park at 5:00 a.m. for a fight and then waiting until midnight because the other side never shows up. Or, for the younger generation, you simply get ghosted.
Negotiation can still feel a bit like door-to-door sales. Will the other side let you in long enough to hear the proposal, or will they slam the door shut? If they refuse to open it, you may eventually need the battering ram of the court system to pry it open so the dispute can be resolved.
So why do lawyers continue to insist on sending notices and demand letters, even when those letters may not result in a final settlement?
Because pre-suit notices and demand letters can serve a much larger purpose: they can help set up and protect the lawsuit that may follow.
Meeting the Conditions Required Before Filing Suit
In petitions and complaints—the documents filed to begin a lawsuit—you will often see a lawyer state that “all conditions precedent have been performed or have occurred.” You may also see a lengthy factual history describing every notice, demand, request, deadline, and opportunity to cure that occurred before the lawsuit was filed.
Why do attorneys include all of this?
In many business disputes, certain claims require notice or actions before they may be brought in court. Depending on the contract, statute, or type of claim involved, the law may expect you to answer questions such as:
- Did you tell the other side how much money you believe they owe?
- Did you give them an opportunity to correct what you claim they failed to do?
- Did you provide notice before selling goods that were left in your possession?
- Was the other side even aware of the alleged mistake, and did you allow them an opportunity to fix it?
- Could defective goods be repaired or replaced?
- Could missing goods or services still be delivered?
- Does the contract require written notice and a specific period of time to cure a breach?
- Does the agreement require the parties to negotiate, mediate, or follow another dispute-resolution process before filing suit?
There are many contractual, statutory, and common-law requirements that may determine what must be included in a notice and how much time the other side must be given to respond.
For that reason, it is often in a litigator’s best interest to send the appropriate demands and notices—and allow any required cure period to expire—before filing the lawsuit. Doing so can help preserve all available claims and avoid an argument that the case was filed prematurely.
A demand letter can therefore operate as a double-edged sword. On one side, it protects and prepares your legal claims. On the other, it may cause the opposing party to stop the challenged conduct, pay the amount owed, turn over the requested property, or otherwise resolve the problem.
That is why lawyers frequently recommend taking these pre-litigation steps.
Obtaining Information Before the Lawsuit Begins
Certain pre-litigation procedures may also allow business owners to obtain documents and records before filing a lawsuit.
For example, depending on the type of business entity and the person requesting the information, a books-and-records demand may provide access to business or financial records. Those documents may help determine what occurred, how much money is involved, whether wrongdoing can be proven, and whether litigation makes financial sense.
In other words, the information gathered before filing suit may help answer an important question: Is this dispute worth pursuing?
Receiving the records first may also allow the attorneys to identify the proper claims, parties, damages, and potential defenses before entering court.
Determining Where and How the Case Should Be Filed
Pre-litigation investigation can also affect where and how a lawsuit is filed.
The proper court may depend on several factors, including where the relevant events occurred, where the parties are located, the amount of money in dispute, the language of the parties’ agreement, and the nature of the claims being asserted.
Taking the time to send appropriate notices, request documents, review contracts, investigate the facts, and evaluate the potential damages can help prevent a lawsuit from beginning on the wrong footing.
Demand letters are not merely angry letters written on law firm letterhead. They can open negotiations, satisfy legal requirements, preserve claims, obtain important information, and place the parties in a stronger position if litigation becomes necessary.
Sometimes the door opens after one knock. Sometimes it gets slammed shut. Either way, it is usually better to knock before bringing out the battering ram.
