- It sets out the claim, what is demanded, and a deadline, usually around 14 days.
- The court rules require an offer to settle before suing, and a letter of demand is the usual way to make it.
- If you receive one, don't ignore it and don't reply in anger.
- Settlement proposals are best made 'without prejudice'.
What a letter of demand is
A letter of demand is a formal letter, usually sent by a lawyer, that sets out a claim against someone and demands payment or some other action by a deadline. It warns that legal proceedings will follow if the demand is not met.
What it should include
A clear letter of demand usually covers:
- who the parties are
- the key facts and the legal basis of the claim
- the documents relied on, such as the contract and invoices
- the exact sum or action demanded
- a deadline to comply, commonly between 7 and 14 days, with 14 days typical
- what will happen if the demand is not met
A well-prepared letter also anticipates the other side's likely defences, so that the strength of the claim is clear from the start.
How it fits the court rules
Since April 2022, the Rules of Court require a party to make an offer of amicable resolution before starting a court claim, unless there are reasonable grounds not to. The rules do not prescribe a letter of demand as such, but it is the usual way to make that offer and to show the court that you tried to settle in good faith.
If you receive one
Take it seriously, even if you believe the claim is wrong.
- Note the deadline, and ask for more time if you need it.
- Don't reply in anger, and don't admit anything in writing.
- Gather the documents relevant to the dispute.
- Take legal advice on whether to pay, negotiate or dispute the claim.
Making a settlement offer
Settlement proposals are usually made on a 'without prejudice' basis, which means they cannot later be used as evidence against you in court. A proposal with specific amounts and dates is more likely to move the discussion forward.
Statutory demands for undisputed debts
Where a debt of S$15,000 or more is not disputed, a creditor can serve a statutory demand instead, which can lead to bankruptcy proceedings against an individual or winding-up proceedings against a company if it is not paid. This is a serious step and is not suitable where the debt is genuinely disputed.
This article is general information on Singapore law and is not legal advice. Rules and agency policies change, and every situation is different. For advice on your own circumstances, speak with one of our lawyers.
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