The demand
letter.

By Jonathan Kleiman, Barrister & Solicitor · Published May 2026

What is a demand letter?

A demand letter is a formal written notice sent to a person or business who owes you money, breached a contract, or caused you a loss. It states the facts of the dispute, identifies the legal basis for your claim, demands a specific remedy (usually payment), and sets a deadline for the recipient to respond.

A demand letter is typically the first step in a legal dispute — and in many cases, the last. A well-drafted demand letter resolves a surprising number of disputes without the need for a court filing.

Why send a demand letter

• It resolves disputes faster — many recipients pay or negotiate once they receive a formal demand, especially one from a lawyer
• It is far less expensive than litigation — a demand letter costs a fraction of what it costs to file and pursue a court claim
• It demonstrates seriousness — the recipient understands that you are prepared to escalate
• It creates a paper trail — the letter becomes evidence of your attempt to resolve the matter before suing
• Courts expect it — a judge will notice if you went straight to litigation without first attempting to resolve the matter directly
• It preserves your legal position — the letter can help establish that you are within the limitation period and put the other party on notice

What to include in a demand letter

An effective demand letter is factual, specific, and professional. It should contain the following elements:

1. Your identity and the recipient's identity

State your full legal name (or your business's legal name) and the recipient's full legal name. If you are writing to a corporation, use the corporation's registered legal name — not just a trade name.

2. The facts

Set out a clear, chronological account of what happened. Include dates, amounts, and references to specific agreements, invoices, or communications. Be factual — do not editorialize or use inflammatory language.

3. The legal basis for your claim

Identify the legal theory supporting your claim. Common examples:

• Breach of contract — the recipient failed to perform their obligations under a written or verbal agreement
• Debt recovery — the recipient owes money and has failed to pay
• Property damage — the recipient damaged your property and is liable for the cost of repair or replacement
• Unjust enrichment — the recipient received a benefit at your expense without a legal basis

4. The specific amount demanded

State the exact dollar amount you are claiming, broken down by category: principal amount owed, interest, out-of-pocket expenses, and any other losses. Be precise and show your math.

5. A deadline for response

Give the recipient a reasonable deadline to respond — typically 10 to 15 business days. The deadline should be specific: "Please respond no later than [date]."

6. Consequences of non-compliance

State clearly what you will do if the recipient does not respond by the deadline — typically, that you will file a claim in the Ontario Small Claims Court (for claims up to $50,000) or the Superior Court of Justice (for larger claims).

7. Professional tone

The letter should be firm but professional. Threats, insults, and emotional language weaken the letter and may be used against you in court. State the facts and the law — that is enough.

Common demand letter mistakes

• Being too vague — "You owe me money" is not a demand letter. State the exact amount, the basis for the claim, and the facts.
• Being too emotional — anger and frustration are understandable, but they do not belong in a legal document. Keep it professional.
• Setting an unreasonable deadline — giving 48 hours to respond to a complex dispute looks unreasonable to a court. Give 10 to 15 business days.
• Making threats you cannot follow through on — do not threaten to sue if you are not prepared to actually file a claim.
• Sending it to the wrong person — make sure the letter is addressed to the correct legal entity. If you are dealing with a corporation, send it to the registered address.
• Not keeping a copy — always keep a copy of the letter and proof that it was sent (registered mail receipt, courier tracking, or email read receipt).

Personal letter vs. lawyer-drafted letter

You can write and send a demand letter yourself. There is no legal requirement that it come from a lawyer. But there is a meaningful difference in how the recipient reacts.

A demand letter on a law firm's letterhead signals three things:

1. You have consulted a lawyer and your claim has been professionally assessed
2. You have legal representation and are prepared to litigate
3. Ignoring the letter will result in a court proceeding

Many recipients who would ignore a personal letter respond promptly to a lawyer's letter — because they know the next step is a lawsuit. A lawyer-drafted demand letter costs between $500 and $1,500 and resolves many disputes entirely.

A good demand letter is the least expensive way to resolve most disputes. A bad one — or none at all — makes everything that follows more expensive.

What happens after you send the demand letter

If they pay

The dispute is resolved. Make sure to document the payment and confirm in writing that the matter is settled.

If they negotiate

The recipient may respond with a lower offer or dispute part of your claim. This is normal. Negotiation is where most disputes settle. A contract dispute lawyer can handle the negotiation to ensure you reach a fair resolution.

If they ignore the letter

If the deadline passes with no response, the next step is filing a claim. The demand letter becomes part of your evidence — proof that you attempted to resolve the matter before suing. See the full guide to suing in Small Claims Court in Ontario.

If they respond with a counterclaim

The recipient may respond by asserting their own claim against you. This is not uncommon — especially in contractor disputes or business disagreements. A lawyer can assess the counterclaim and advise on how to respond.

Frequently asked questions

Is a demand letter legally required before suing in Ontario?

In most cases, no — you can file a claim without sending a demand letter first. However, it is strongly recommended. It demonstrates to the court that you attempted to resolve the matter, and it resolves many disputes without litigation.

How long should I give the other party to respond?

A typical deadline is 10 to 15 business days. The deadline should be reasonable — too short and it looks unreasonable to a court; too long and it delays your next steps.

Should I hire a lawyer to write a demand letter?

A demand letter from a lawyer carries significantly more weight. It signals that your claim has been professionally assessed and that you are prepared to litigate. Many disputes settle at the demand letter stage specifically because a lawyer is involved.

How much does a demand letter from a lawyer cost?

Demand letters from a Toronto lawyer typically cost between $500 and $1,500. Jonathan Kleiman offers flat-fee demand letters — the fee is quoted before work begins.

What happens if the other party ignores my demand letter?

If the demand letter is ignored, the next step is filing a claim in Small Claims Court (for disputes up to $50,000) or Superior Court (for larger claims). The demand letter becomes evidence that you attempted to resolve the matter first.

Get a demand letter that gets results

Jonathan Kleiman drafts demand letters for Toronto individuals and businesses across every type of dispute — unpaid invoices, breach of contract, contractor disputes, debt recovery, and more. Flat-fee pricing, no surprises.

Call 416-554-1639 or book a free consultation.