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Small Claims Demand Letter

How to Write an Effective Small Claims Demand Letter (Scroll Down for a Sample/Example)

The letter a plaintiff uses to begin settlement discussions is what’s called a demand letter; or to look at it another way, a demand letter is simply a demand to be paid for money or a debt owed to you. A demand letter is just like it sounds; it’s a written letter directed to the defendant or defendants outlining the strength of the plaintiff’s case and making a demand for the payment of the specific sum of money in exchange for settlement. Lawyers use demand letters all the time.

Small Claims Court

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The Small Claims Court Guidebook from Entrepreneur Magazine and GimmeLaw.

The Small Claims Court Guidebook teaches you everything you need to win big in small claims court, without a lawyer. You’ll learn how to evaluate your case, prepare witnesses and evidence, collect judgments, and much more.

To see a table showing the statute of limitations for all 50 states , click here .

There are several ideas that a plaintiff will wish to convey in a demand letter one of the most important is to convince the defendant that settling the case is better than going to trial. So there are some things you will always say in a demand letter. For example, you will always make a general statement that it is better to settle a case than to spend the expense and time of going to trial. Even if everyone knows it you say it anyway. A good demand letter should be threatening without being combative — there is a difference — and it should be persuasive.

Small Claims Demand Letter Expert Tip:

When communicating with an opponent, never say “you might want to get a lawyer to help you with your case” or “you need to get help with this down at the court, they have free help” or anything to that effect. An experienced lawyer would never say such a thing-it amounts to giving good advice to your opponent. You don’t want your opponent to have a lawyer; they are more likely to make a mistake if they represent themselves.

Drafting a Small Claims Demand Letter

Drafting a demand letter is a good idea for another reason. Some cases in some courts require that a demand to be made before a case be initiated. But researching whether a demand is required isn’t even worth the effort; it’s easier just to send a demand and save a copy of it. Even if the demand isn’t required by law, sometimes judges will ask informally if the demand has been made. Judges always like to see that some effort at settlement has been made before coming to court.

Drafting a demand letter is very simple. A demand letter states the following:

  • In the opening paragraph you should introduce to you are and who the parties to the dispute are.
  • A brief summary of the underlying dispute. For example, if the case is a contract case you should outline the basic terms of the contract. Or, if the case is a negligence case you should outline the basic facts of the incident.
  • You should state your monetary demand in clear terms. You must also state a time frame for the acceptance of the offer.
  • Finally, you advise your opponent of the actions you’ll take if the demand is not accepted.

Sample Small Claims Demand Letter

The following demand letter is a demand for an overdue balance on a software development contract.

Michael Samuels
731 9th Avenue Suite E
San Diego, CA 92101
619.501.3825
fax: 419.735.2386

January 15, 2008
Kevin R. Baker
Big Bob’s International Inc.
Royal Bank Building
Suite 2000
335 8th Ave. S.W.
New York, New York 10001

VIA US MAIL

RE: Demand for Payment under Professional Services Agreement

Dear Mr. Baker,

As you know, I am president of Demand-Letter, Inc. (“Demand-Letter”), and I am writing to you about claims that Demand-Letter has against your company, Big Bobs International Inc. (“Big Bobs”) under the Professional Services Agreement (“Agreement”) dated March 17, 2006.

This letter shall serve as our final demand for payments under the agreement.

Under the terms of the Agreement, Demand-Letter is entitled to $13,000. Our records show that we have received $8,500. This leaves a remaining balance of $4,500.

Furthermore, Demand-Letter performed extra work beyond the terms of the Agreement in the form of additional software modules and changes from the specifications outlined in the Agreement (“Overages”). Our invoices show $2,800 in Overages.

With the preceding in mind, we therefore submit the following demand.

1. The remaining balance of $4,500 must be paid within 5 days of the date of this letter in the name of Demand-Letter, Inc.

2. With respect to the balance for Overages of $2,800, we will accept $500, also to be paid within 5 days of the date of this letter in the name of Demand-Letter, Inc.

3. Upon receiving the full balances due under the Agreement, Demand-Letter will grant a full license to Big Bobs of all work product under the Agreement.

4. You must agree in principle to the terms outlined herein within 2 days of the date of this letter. Thereafter, I will draft a settlement agreement formalizing these terms before the 5-day deadline for payment of the outstanding balances.

This offer is not subject to negotiation, including any arguments that Big Bobs might impose with respect to issues of performance under the Agreement. If you do not accept the offer outlined in this demand in writing within 2 days of the date of this letter, this offer will be automatically and permanently withdrawn.

Upon the withdrawal of this offer due to your non-acceptance, you are instructed (i) to return to Demand-Letter all work product under the Agreement, including, but not limited to, all software code, files, documentation, and other materials; (ii) that Demand-Letter shall terminate the Agreement pursuant to the “Breach and Termination” clause, and pursuant to such clause, all sums under the Agreement shall become due and payable and shall bear 1% interest per month from the date of invoice; and (iii) that Demand-Letter shall take immediate and permanent steps to ensure that Big Bobs never receive a license to the work product under the Agreement.

Thereafter, we will pursue the case through the court system. It is only fair to warn you that we may report this matter to the credit reporting bureau, and that that event, your credit rating may suffer. You can avoid the time and expense of court by resolving this matter. Our offer is generous, and we sincerely hope you accept it.

I await your response, and sincerely hope that you accept the terms of our demand on behalf of Big Bobs.

Yours truly,

/signature/

Michael Samuels

President, Demand-Letter, Inc.

Small Claims Court

Want to learn how to Dominate in Small Claims Court?

Small ClaimsCheck Out Our Book! Only $5.99 for Kindle!

The Small Claims Court Guidebook from Entrepreneur Magazine and GimmeLaw.

The Small Claims Court Guidebook teaches you everything you need to win big in small claims court, without a lawyer. You’ll learn how to evaluate your case, prepare witnesses and evidence, collect judgments, and much more.

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Small Claims Court | Statute of Limitations

All civil claims which arise in small claims court will be subject to some statute of limitations. A statute of limitations is a law that dictates the number of years in which a claim must be brought for liability to attach to a defendant. If a plaintiff waits beyond the expiration of the statute of limitations to bring his claim, the claim is lost forever.

See a table showing Small Claims Court Jurisdiction Limits.
See a table showing the statute of limitations for all 50 states.

Consider also that statutes of limitation will differ from claim to claim. For example, in California, an action for personal injury must be brought within two years of the incident, while an action for damage to personal property must be brought within three years of the incident. If you are involved in a car accident case that is two and a half years old, the plaintiff in the case cannot sue for personal injury damages, only for damages to property. Similarly, in California actions on contracts must be brought within two years for oral contracts, and four years for written contracts.

Also, statutes of limitation will differ by state. In New York State, actions on contracts must be brought within six years. Most states have a shorter statute of limitations on contracts. If your claim (or a claim against you) is a few years old, you may wish to employ some strategic maneuvers to ensure that your case is heard in a particular state.

Small Claims Court

Want to learn how to Dominate in Small Claims Court?

Check Out Our Book! Only $5.99 for Kindle!

Small Claims Court: an Insider’s Guide to Winning Big from TastyPlacement Press and GimmeLaw.

The Small Claims Court Guidebook teaches you everything you need to win big in small claims court, without a lawyer. You’ll learn how to evaluate your case, prepare witnesses and evidence, collect judgments, and much more.

Example: The Effects of the Statute of Limitations on a Multi-State Claim

John York of New York State enters a contract with Julie California of California for the immediate sale of valuable baseball cards. The contract is oral, and is entered on January 1, 2005. Julie immediately pays John, but John never delivers the baseball cards. Julie puts the matter off until February 1, 2007. The statute of limitations on oral contracts is two years in California, and six years in New York. Because two years have passed since the breach of contract, Julie can no longer bring her claim in California, she must bring her claim in New York. Now John enjoys the geographical advantage because Julie will have to travel to pursue the case. Also, John can now argue in New York court that the case should have been brought in California.

When Does the Statute of Limitations Begin to Run?

Generally speaking, the statute of limitations for a particular claim will begin from the time the plaintiff learned of the claim. A plaintiff must file his claim with the court before the expiration of the statute. In negligence and personal injury actions, the statute begins to run from the plaintiff learned of the injury. Imagine for a moment the mythical case of the doctor that leaves a sponge inside a patient following an operation. The patient may not know the sponge is there for years after the operation. Would it be fair to the patient to have her medical malpractice claims expire before she even knew that a claim existed? Of course not, and that is why the plaintiff must know of the claim before the statute of limitations can begin to run. In contract actions, that means from the time the contract is breached, not from the time the contract is signed. As you might imagine, claims that fall very close to the expiration of the statute of limitations can wind up being argued solely on the fact of when the statute began to run.

The statute of limitations “clock” can sometime be frozen temporarily to protect worthy plaintiffs. This principle is called a “tolling” of the statute of limitations. Tolling statutes, like most laws, differ from state to state. Some general rules have emerged, though. Statutes of limitations will generally be tolled when a plaintiff is serving in the military, is a minor, is declared incompetent, is the subject of a bankruptcy proceeding, etc. When the circumstances that caused the tolling of the statute no longer exist, the statute of limitations starts to run again.

The statute of limitations is a powerful and effective weapon in the defendant’s toolbox. As a defendant, you want to scour the facts of your case to determine if you can knock out any of the plaintiff’s claims under the statute of limitations.

Small Claims Court

Want to learn how to Dominate in Small Claims Court?

Check Out Our Book! Only $5.99 for Kindle!

Small Claims Court: an Insider’s Guide to Winning Big from TastyPlacement Press and GimmeLaw.

The Small Claims Court Guidebook teaches you everything you need to win big in small claims court, without a lawyer. You’ll learn how to evaluate your case, prepare witnesses and evidence, collect judgments, and much more.

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Small Claims Court Limits

Small Claims Court – Jurisdictional Limits

The following table shows the jurisdictional limits of Small Claims Courts for all states.

(Small Claims Courts have maximum dollar amounts that can be sought in small claims cases).

 

Jurisdiction Maximum Dollar Amount
Alabama Small Claims Court $3,000
Alaska Small Claims Court $10,000
Arizona Small Claims Court $2,500
Arkansas Small Claims Court $5,000
California Small Claims Court $7,500
Colorado Small Claims Court $7,500
Connecticut Small Claims Court $5,000
Delaware Small Claims Court $15,000
Florida Small Claims Court $5,000
Jurisdiction Maximum Dollar Amount
Georgia Small Claims Court $15,000
Hawaii Small Claims Court $3,500
Idaho Small Claims Court $4,000
Illinois Small Claims Court $10,000
Indiana Small Claims Court $6,000
Iowa Small Claims Court $5,000
Kansas Small Claims Court $4,000
Kentucky Small Claims Court $1,500
Louisiana Small Claims Court $3,000
Maine Small Claims Court $4,500
Maryland Small Claims Court $5,000
Jurisdiction Maximum Dollar Amount
Massachusetts Small Claims Court $2,000
Michigan Small Claims Court $3,000
Minnesota Small Claims Court $7,500
Mississippi Small Claims Court $2,500
Missouri Small Claims Court $3,000
Montana Small Claims Court $3,000
Nebraska Small Claims Court $2,700
Nevada Small Claims Court $5,000
New Hampshire Small Claims Court $5,000
New Jersey Small Claims Court $3,000
Jurisdiction Maximum Dollar Amount
New Mexico Small Claims Court $10,000
New York Small Claims Court $5,000
North Carolina Small Claims Court $5,000
North Dakota Small Claims Court $5,000
Ohio Small Claims Court $3,000
Oklahoma Small Claims Court $6,000
Oregon Small Claims Court $5,000
Jurisdiction Maximum Dollar Amount
Pennsylvania Small Claims Court $10,000/
$8,000
Rhode Island Small Claims Court $1,500
South Carolina Small Claims Court $7,500 1
South Dakota Small Claims Court $8,000
Tennessee Small Claims Court $15,000 2
Texas Small Claims Court $10,000
Utah Small Claims Court $7,500
Vermont Small Claims Court $3,500
Virginia Small Claims Court $5,000
Jurisdiction Maximum Dollar Amount
Washington Small Claims Court $4,000
West Virginia Small Claims Court $5,000
Wisconsin Small Claims Court $5,000
Wyoming Small Claims Court $7,000
1 No limit in landlord-tenant cases.
2 However, in counties of more than 700,000 in population, the limit is $25,000 (Anderson County and Shelby County). There is no limit in forcible entry and detainer cases or to recover specific personal property, except $25,000 limit for alternative money judgments in personal property cases in counties of less than 700,000.
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