Understanding Letter of Demand in South Africa

What is a Letter of Demand?

A letter of demand is written correspondence that sets out a legal claim and makes a demand for certain relief in respect of the claim.

A letter of demand is often a precursor to litigation and should comply with certain prescribed legal requirements in respect of the legal claim. This type of document is commonly used in South Africa when a creditor is owed money by a debtor.

What is the Purpose of a Letter of Demand?

In all disputes, you are expected to make serious attempts to resolve your dispute before approaching a court for relief. This means you must behave reasonably to try to avoid litigation and this is usually evidenced by way of a letter of demand. If a party is found not to have acted reasonably in attempting to settle the dispute before instituting proceedings in a court, then the courts can take this into account when deciding which party should pay costs, and the level of those costs.

The primary purpose of a letter of demand is to inform the defendant that the plaintiff has a cause of action against him or her, and to persuade him or her to settle the claim, or to remove the cause of complaint within a stated time so as to avert formal proceedings from being instituted. This document is often used when a creditor has made several attempts to collect the debt but has been unsuccessful. The Letter of Demand serves as a final notice to the debtor that legal action will be taken if they do not pay the debt within a specific timeframe.

Psychologically, a demand letter conveys that you are not afraid to litigate should your demands not be taken seriously.

Is a Letter of Demand Necessary?

There are certain instances where a formal letter of demand is prescribed by law or required in terms of a written agreement between the parties e.g. actions against the State, contractual disputes, evictions and certain matters which are governed by the National Credit Act or the Consumer Protection Act.

In all other instances, it is not necessary to issue a letter of demand before initiating legal proceedings, however a letter of demand can often bring about a swift and amicable resolution to a dispute without incurring unnecessary legal costs.

Expert Legal Advice on Letter of Demand

Letter of Demand can be complex, and it is crucial to obtain expert legal advice before issuing one or responding to one. It is critical that you do not ignore a demand letter. If you do not agree with the content of the claim, you should immediately seek advice from a lawyer.

Conclusion

Letter of Demand is a useful legal tool, however, they must be issued correctly and according to the proper legal process. Barter McKellar’s litigation lawyers are highly effective in drafting letters of demand and assisting with the resolution of disputes. If you would like to find out more, contact us today.