Letters of Demand and Their Usages in Singapore
A letter of demand (LOD) is a letter setting out a list of demands for the recipient to comply with. LODs are usually sent by lawyers on behalf of their clients, threatening legal action if the demands are not satisfied within a certain period of time.
Letters of Demand and Originating Claim
An originating claim is a formal court document commencing legal proceedings. To start a lawsuit, a claim is filed with the court, and subsequently served onto the defendant. Sometimes, legal actions are commenced without the sending of an LOD beforehand.
In contrast, an LOD is not a formal court document. Following the issue of an LOD, the claimant may choose to commence legal proceedings, pursue alternative courses of action, or drop the matter altogether.
Purpose of a Letter of Demand
An LOD is usually sent to warn the recipient of the claimant’s intention to commence legal action unless payment is made. Doing so may potentially save huge costs by avoiding litigation if the recipient complies.
Additionally, an LOD is sometimes used as evidence in court, as proof of the claimant’s attempt to settle the matter.
Contents of a Letter of Demand
AN LOD usually contains the following information:
- The identity of the claimant;
- The identity of the lawyer and law firm acting for the claimant and their contact details;
- The matter in dispute and the material facts;
- The claims against the recipient of the LOD;
- The claimant’s list of demands, which, for instance, may require the recipient to satisfy the sum owed to the claimant and his legal fees;
- A deadline before which the recipient must satisfy the demands, failing which legal action may be taken.
Common Terms and Jargon Used in a Letter of Demand
- Without prejudice: this label is intended to protect one’s legal rights, as in, without prejudice to one’s rights or privileges. In negotiation, the label means, “without prejudice to the position of the writer of the letter if the terms he proposes are not accepted”. Communications made on a “without prejudice” basis in the course of negotiations for a settlement is generally inadmissible as evidence. Despite this, a “without prejudice” label is not always effective. Read more about without prejudice communications in Singapore in our other article.
- Reserves his rights: to reserve one’s strict legal rights, such as the right to commence legal proceedings.
- Premises: all that has been stated in the foregoing.
- Default: to default is to fail to perform an obligation.
- Alternative dispute resolution: ways to resolve a dispute without going to court. Examples include mediation, arbitration, and neutral evaluation.
- Ex parte: where one party makes an application or meets and speaks with a judge without the presence of the other party.
How to Respond to a Letter of Demand
It is unwise to ignore an LOD, as the sender may take your silence as a stubborn denial of his claims. Retain the LOD, and seek clarification if the contents of the letter are ambiguous, or if further details are required.
If you dispute the claim, you should promptly seek legal advice. If you do not dispute the claim, you may choose to comply with the LOD.
You may also contact the claimant or his lawyer and try to negotiate settlement of the matter on a “without prejudice” basis. In most cases, this allows you to try to resolve the matter without putting at risk your legal rights, i.e. you are keeping open the option that you may take a different stance if the matter is litigated in court.
How to Write Your Own Letter of Demand
Anyone may send a letter of demand. The advantages of engaging a lawyer for legal representation are manifold – a lawyer is able to provide comprehensive advice, and having a lawyer issue a letter of demand (with the law firm’s letterhead printed on the LOD) shows a firm intention that one is serious about taking action to resolve your matter.
Notwithstanding the advantages, a layperson may also send an LOD. Here are some points to note:
- Be polite – a little courtesy may encourage the recipient to comply with your demands and avoid the trouble of litigation.
- Clearly summarise the matter or dispute at hand, preferably in chronological order.
- Attach copies of any supporting documents (such as a tax invoices) to your LOD to support your claim.
- Ask for exactly what you want – for instance, if you want to claim for $3,000 for damages to your vehicle, state this figure clearly, and set a deadline for repayment.
- Conclude the LOD by communicating your intention of pursuing legal remedies if your demands are not met.
- Make and keep copies of the LOD.
- If possible, use registered mail to obtain proof that the recipient did receive your LOD, to counter any potential claims made in court by the recipient that the LOD was not received.
Sample Letter of Demand
The following is a sample of a simple LOD:
5 September 2014
Tasty Food Pte Ltd
1234 Main Street, Singapore 678901
On 1 August 2014, at about 7pm, I visited your restaurant, Tasty Foodz, with my wife. I made an order for the Deluxe Seafood set meal. A copy of the receipt for my order is enclosed with this letter.
After consuming the food prepared by your restaurant, I left with my wife and returned to my home. Subsequently, at around 11pm, I was beset by a terrible abdominal pain.
I was taken to the A&E department of General Hospital, where I was examined by the doctors, who diagnosed me with severe food poisoning. I received treatment and was subsequently warded in the Intensive Care Unit. In total, I was hospitalised for 10 days. The hospitalisation and medical bills amounted to S$7,500. As a self-employed sole proprietor of a trading business, my losses in income for the duration of my hospital stay numbered at S$10,000. I have enclosed a copy of the hospital tax invoice, together with a calculation of my losses in income, with this letter.
According to the advice of my specialist doctor, Dr Han Ee Min, my food poisoning is most likely caused by my consumption of the food prepared by your restaurant. Dr Han is fully prepared to testify in court.
Accordingly, I will require your company to send to me a cheque for S$17,500, to compensate for my medical bills and loss of income, before 12 September 2014, 4pm, to my address, 123 Lower Delta Road, Singapore 555222. You may contact me at 9555 2222.
If payment is not received by the aforementioned time and date, I will have no choice but to commence legal proceedings against your company.
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