Letters of Demand

What to do when you receive a letter of demand, and how to send one that gets results.

A letter of demand is a formal notice requiring payment or performance by a deadline, failing which legal action will follow. It is often the first step in a dispute, and how you respond, or what you send, can shape everything that follows.

Received a letter of demand?

  • Do not ignore it: silence can lead to summons and default judgment.
  • Check the deadline: and diarise it immediately.
  • Assess the claim: is the amount correct, is the debt valid, and has it prescribed?
  • Be careful what you say: an acknowledgement of debt can interrupt prescription and be used against you.
  • Get advice early: a well-reasoned response can resolve or narrow the dispute.

Sending a letter of demand

An effective letter sets out the facts, the legal basis of the claim, the amount owed and a clear deadline. For credit agreements, the National Credit Act requires a specific notice before legal action is started.

Prescription

Most debts prescribe after three years. A letter of demand on its own does not interrupt prescription. Serving a summons or obtaining an acknowledgement of debt does.

When we can help

We assist businesses and individuals who:

  • Have received a letter of demand and need a response.
  • Are owed money and want to recover it.
  • Need to demand performance under a contract.
  • Want to dispute an invoice, penalty or damages claim.
  • Have received a section 129 notice under the National Credit Act.
  • Want to settle a dispute before litigation.

How the process works

From demand to resolution.

  1. Review
    We review the letter or your claim, the contract and the supporting documents.
  2. Strategy
    We advise on the strength of the claim, possible defences, prescription and the costs and risks of litigation.
  3. Response or demand
    We prepare a formal response or letter of demand that protects your position.
  4. Negotiation
    Many matters settle at this stage, sometimes with a payment arrangement or acknowledgement of debt.
  5. Litigation
    If the dispute is not resolved, we advise on issuing or defending summons in the appropriate court.

A letter of demand from an attorney is often enough to prompt payment, and can be a cost-effective first step in recovering a debt.

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What to prepare

Helpful documents for your matter.

  • The letter of demand or details of your claim.
  • The contract, quotation or order.
  • Invoices, statements and proof of payment.
  • Relevant emails and messages.
  • Any previous correspondence about the dispute.

Common Questions

The sender may issue summons. If you do not defend the summons, judgment can be granted against you by default, followed by attachment of your assets or salary.
No. A letter of demand on its own does not interrupt prescription. Prescription is interrupted by service of a summons or by the debtor acknowledging the debt.
Yes. Many disputes are settled after a letter of demand. Any settlement should be recorded in writing, ideally with legal advice.
A reasonable deadline is usually seven to fourteen days, depending on the matter and any contractual or statutory requirements.
Not necessarily, but a letter from an attorney carries more weight and helps ensure the claim is properly set out and any statutory requirements are met.

RECEIVED OR NEED TO SEND A LETTER OF DEMAND?

We respond to and prepare letters of demand that protect your position and give you the best chance of resolving the matter quickly.

Read more: Debt recovery in South Africa · Breach of contract: your remedies

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This page is general information and not legal advice.

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