Prompt Pack Demand Letter

Demand Letter

A demand letter is the formal notice that precedes legal action. It serves three purposes: (1) it puts the opposing party on notice of the claim in documented form; (2) it gives them an opportunity to settle without litigation; and (3) in many MENA jurisdictions, it is a procedural prerequisite or strong convention before filing suit. A well-drafted demand letter creates a clear record and maximises settlement leverage.

When to use this

• A client is owed money or has suffered a breach and has not received a satisfactory response to informal communications.
• The dispute is about to become a formal legal matter and the client wants one last documented opportunity for resolution.
• The applicable procedural rules or contract terms require a demand or notice before litigation can be commenced.
• A client wants to establish the date of formal notice (relevant for limitation periods and interest calculations).
• The opposing party's insurer has requested a formal demand as a condition of engaging with the claim.

Required inputs

Optional inputs

• Whether the letter should be sent by a lawyer's letterhead (often more effective) or the client directly.
• Whether the letter should propose settlement at a specific figure.
• Whether the client is open to mediation as an alternative.
• Whether the claim involves multiple parties.
• Whether interest on the debt/damages should be claimed.

Letter structure

Header

• Law firm letterhead (if sent by counsel) or client letterhead.
• Reference number.
• Date.
• Full name and address of the opposing party.
• "Without Prejudice Save as to Costs" — only add if the letter contains a settlement offer; a pure demand letter should not be marked without prejudice (it would exclude it from evidence in some jurisdictions).
• Subject line: "Formal Demand — [Brief description of claim] — [Reference, if any]"

1. Identification of the parties

"We act for [Client Name] ('our Client') in connection with the matter described below. We write to you in your capacity as [role — e.g., contracting party / director / guarantor]."

2. Background and facts

A concise, chronological narrative covering:

• The relationship between the parties (if any): contract, transaction, statutory obligation.
• What the opposing party was required to do.
• What they did (or failed to do).
• When the breach or failure occurred.
• The client's reliance and resulting damage.

Keep this factual and objective — avoid inflammatory language that will harden positions.

3. Legal basis for the claim

State the legal basis clearly:

• Breach of contract: Identify the specific contract, the provision breached, and how the breach has been established.
• Statutory claim: Identify the statute, article, and the specific obligation violated.
• Tort / delict: Identify the duty, breach, causation, and loss.
• Unjust enrichment: Where the opposing party has received a benefit at the client's expense without legal justification.

MENA legal basis notes:

4. Damages and quantum

• State the amount claimed as clearly as possible.
• Break down the claim into components if multiple heads of damage: principal debt / unpaid fees / penalty / consequential loss / interest.
• State the currency.
• State the basis for the interest claim if applicable:
  • UAE Civil Code: the legal rate of interest for commercial claims is 5% (or 9% in commercial matters — UAE Commercial Code).
  • DIFC: courts award interest at a rate they consider appropriate; commercial rate is typically the central bank rate plus a margin.
  • KSA: Islamic finance principles mean "interest" (riba) is not awarded as such; damages for late payment may be framed differently before Saudi courts; DIFC/ADGM arbitration seats avoid this complexity.
  • Lebanon: interest rates are regulated; Lebanese courts apply the contractual rate, failing which the legal rate of 9% per year under the COC.
• State that the client reserves the right to claim additional damages that become ascertainable before or during proceedings.

5. Supporting evidence

• List the key documents supporting the claim.
• State which documents are attached to the letter and which are available.
• Do not attach all evidence — select the 3–5 documents that most clearly establish the claim; retain the rest for proceedings.

6. The demand

State clearly and specifically what is demanded:

• "We hereby demand that you pay our Client the sum of [amount] in [currency] by [date] ('the Deadline')."
• If a non-monetary obligation: "We hereby demand that you [comply with / perform / cease and desist from] [specific obligation] by [date]."
• Payment details: provide the bank account for payment (IBAN, SWIFT, bank name, beneficiary) to remove any excuse for non-payment.

7. Consequences of non-compliance

State, without exaggeration, what will happen if the demand is not met by the Deadline:

• "If we do not receive [payment / compliance] by [date], our Client is instructed to commence [arbitration / litigation / insolvency proceedings] against you without further notice."
• Do not threaten actions the client cannot or will not take — this undermines credibility.
• Include: "Our Client reserves the right to claim all legal costs and interest accruing from the date of this letter."

8. Without prejudice settlement offer (optional)

If the client wishes to propose settlement at a specific figure less than the full claim, include a separate "WITHOUT PREJUDICE" paragraph at the end. This makes the settlement offer inadmissible in evidence in most jurisdictions: "Our Client, without admission of any limitation of its claim, is prepared to accept [settlement amount] in full and final settlement of this matter if paid by [earlier date]. This offer will lapse on [date]."

9. Closing

• Contact details for the responding party.
• Instruction that all communications should be directed to the lawyer, not the client directly.
• "Yours faithfully" / "Yours sincerely" (per local convention).

MENA-specific procedural requirements

Delivery method

The method of delivery determines when formal notice is given and whether it can be proved:

• UAE: Registered post, courier with proof of delivery, or notarized Notice (Inzar) through a UAE Notary Public.
• KSA: Registered post; certified post through Saudi Post; notarized demand through a Saudi Notary.
• Lebanon: Bailiff (huissier) service is the most formally sound method; registered post with acknowledgment is common.
• Egypt: Notarized Inzar through the Egyptian Notary Office is the gold standard; registered post is commonly used.
• DIFC/ADGM: Email with read receipt and PDF attachment to the registered email address; follow up with courier.
• Cross-border: Consider whether service of the demand must comply with the Hague Service Convention or bilateral treaty between the jurisdictions.

Common mistakes

• Demand letter that is so aggressive it makes settlement impossible — a good demand letter should be firm but leave a door open.
• Threatening criminal proceedings to enforce a civil debt — in many MENA jurisdictions, improperly threatening criminal prosecution is itself tortious or an abuse of process.
• Sending the letter to the wrong address or the wrong entity — this invalidates formal notice.
• Setting an unrealistically short deadline (24–48 hours) — courts view this negatively and it prevents genuine settlement.
• Not keeping a copy of the letter and the delivery record — both are evidence.

Related skills

• [[prompt-pack-case-assessment-memo]]
• [[prompt-pack-settlement-agreement]]
• [[prompt-pack-arbitration-statement-of-claim]]
• [[prompt-pack-litigation-strategy-memo]]
• [[prompt-pack-case-law-research-prompt]]