A letter of intent to sue (with settlement demand) is a communication a prospective plaintiff sends to a prospective defendant to inform them of their plan to sue and give them a chance to pay a settlement demand instead. It can prevent the need for the prospective plaintiff to file a lawsuit, potentially saving both parties time and court expenses in the long run.
It clarifies the nature of the dispute, helps you organize your case’s details, encourages open communication, and reduces misunderstandings.
What Is a Settlement Demand?
A settlement demand is a formal request from an afflicted party to a negligent or destructive party seeking a resolution or specific amount of compensation. It’s an attempt to resolve a legal issue without going to trial.
The demand explains the damage incurred, such as property damage or lost wages, and provides an amount the afflicted party believes will fairly compensate them for their losses.
Example of a Settlement Demand
Here’s an example of a settlement demand:
After discussions and negotiations, Company X and Company Y have reached a settlement regarding a contractual dispute over the delayed delivery of goods.
Company X agrees to accept a payment of $10,000 from Company Y within 30 days to settle all outstanding claims related to the delayed deliveries. Once Company X receives the payment via bank transfer, both parties agree that Company X will not pursue any further legal action against Company Y concerning this matter.
When to Use a Letter of Intent to Sue (With Settlement Demand)
Here are some instances when using a letter of intent to sue (with settlement demand) can be beneficial:
- Debt Collection: You may send a letter of intent to sue after issuing a demand for payment letter and not receiving an adequate response.
- Property Disputes: You may want to resolve a property damage claim or a landlord-tenant dispute via a settlement before initiating legal proceedings.
- Incomplete Work: You may attempt to settle with an independent contractor who didn’t finish a project or completed unsatisfactory work.
- Personal Injury Claims: The defendant may issue a release of liability form and a settlement offer to settle the claim without going to court.
Is a Letter of Intent to Sue (With Settlement Demand) Required?
It depends on the situation, but yes, a letter of intent to sue (with settlement demand) may be required in some cases. For example, a court may require you to send a demand letter before pursuing a lawsuit that pertains to cases involving:
- Claims against governmental authorities
- Complaints against health or auto insurance companies
- The violation of consumer protection statutes
- Medical malpractice claims
- Breach of contract claims
- Agreements that include a requirement for a demand letter if a dispute arises
Even in other cases where a demand letter isn’t required, it’s strongly recommended to facilitate a smooth resolution of a legal issue.
How to Write a Letter of Intent to Sue
Step 1 – Write the Header
Write the header for your pre-suit letter, including your name, address, and contact information in the first block. Insert the date you’re writing the letter on a new line.
In a new block below the date, insert the recipient’s name, address, and contact information. This way, you can identify both parties and state to whom the letter is addressed.
Step 2 – Compose the Introduction
Compose the introduction with a short salutation. A simple “Dear Recipient’s Name” will work well. Provide a brief statement that declares your intent to sue if the recipient doesn’t address the problem via a settlement.
Step 3 – Provide Background Details
Provide background information on why you’re suing or seeking a settlement demand. Give a detailed description of the recipient’s wrongdoings and present supporting evidence.
Step 4 – State the Settlement Terms
List the amount you’re willing to settle the situation for. Provide any other provisions the defendant must follow for you not to sue.
Step 5 – Issue a Deadline
Issue formal notice of a deadline by clearly stating a date by which the recipient must comply. For added clarity, you can provide a timeframe (such as 30 days) and an exact date by which you expect to receive the proposed amount.
Step 6 – Include a Legal Action Statement
State that you will take the case to small claims court or pursue another type of legal recourse if the letter’s recipient doesn’t comply with your settlement demand.
Step 7 – Write a Closing Statement
Conclude your letter stating that you’d like to resolve the situation privately via a settlement before filing a suit becomes necessary. A concise conclusion may help you achieve mutual agreement with the other party, preventing the need for a costly lawsuit.
Sending Demand Letters
While there’s no official protocol for sending demand letters, it’s best to deliver them via certified mail. This way, you can prove that the recipient actually received the letter. A receipt of delivery may also become useful as evidence later if the court sees that you attempted to receive a settlement first before pursuing legal action.
Example of a Letter of Intent to Sue
Here’s an example of a letter of intent to sue (with a settlement demand) from a car accident victim to the perpetrator’s insurance company:
Jordan Blake
Providence, RI 02902
[email protected]
July 16, 2024
Clearview Insurance Company
Attn: Claims Department
Providence, RI 02902
[email protected]
Dear Claims Department,
Re: Demand for Payment and Intent to Initiate Legal Action
I’m writing regarding Claim Number 897724 concerning the car accident on April 1, 2024, involving myself, Jordan Blake, and your insured, Marcus Perry. The police report and eyewitness accounts confirm that the accident resulted from Mr. Perry running a red light, which caused substantial damage to my vehicle and inflicted serious injuries on me.
Despite submitting all required documentation, including medical bills and repair estimates, Clearview Insurance Company has declined to cover the full costs of my medical expenses and vehicle repairs. The outstanding amount is $40,000, which includes $25,000 for medical expenses, $10,000 for auto repair shop expenses, and $5,000 for additional damages and losses incurred as a result of this accident.
This letter is my formal demand for the immediate payment of the full $40,000 owed. Attached, you will find copies of all pertinent documents, including medical records, repair estimates, and the police report. Despite my repeated attempts to resolve this matter through your claims process, I have not received adequate compensation or a satisfactory response.
I require that the full payment of $40,000 be made within the next 30 days, no later than August 16, 2024. You can make the owed payment via a check payable to Jordan Blake or through an agreed-upon electronic transfer. Please contact me to arrange the payment details.
Failure to comply with this demand within the specified timeframe will compel me to initiate legal proceedings to recover the full amount owed, along with any additional legal costs. I trust we can resolve this matter promptly and avoid litigation.
If you have any questions or require further documentation, please contact me at [email protected]. I look forward to your prompt attention to this matter.
Thank you for your immediate cooperation.
Sincerely,
Jordan Blake
[email protected]
Sample Letter of Intent to Sue (With Settlement Demand)
Download a template for a letter of intent to sue (with settlement demand) in PDF or Word format below:
