Letter of Demand FAQ — Common Questions Answered | Claim Done
Letter of Demand FAQ — Frequently Asked Questions
What is a letter of demand?
A letter of demand is a formal written notice requiring a person or company to pay money or take a specific action within a defined timeframe — usually 14 days. It is the first formal legal step in Australian dispute resolution.
Is a letter of demand legally binding?
The letter itself is not a court order — it cannot force payment. However, it creates a formal legal record that you put the other party on notice, and most Australian tribunals require evidence that you sent one before you can file a claim.
How much does a letter of demand cost?
Solicitors typically charge $400–$1,200 for a letter of demand. Claim Done charges a flat $97 — the AI drafts it from your facts, cites the applicable law, and delivers it automatically.
Does a letter of demand have to come from a lawyer?
No. There is no legal requirement for a letter of demand to be prepared by a solicitor. An AI-generated letter citing the correct legislation is just as effective.
What is the standard deadline in a letter of demand?
14 days from the date of delivery is the standard in Australia and is regarded as reasonable by courts and tribunals. Always state the deadline as a specific date rather than “within 14 days.”
What happens if they ignore my letter of demand?
Your options depend on who owes you the money. For individuals and sole traders, file a tribunal application (QCAT, VCAT, NCAT, SAT, SACAT or ACAT). For companies with debts of $4,000+, a statutory demand under the Corporations Act is more powerful. Claim Done prepares both.
Can I send a letter of demand to a company?
Yes. Address the letter to the company at its registered address (searchable on ASIC). For debts over $4,000, consider following up with a statutory demand if the letter is ignored — it carries the threat of wind-up proceedings.
What should be in a letter of demand?
At minimum: your name and contact details, the recipient’s details, the exact amount owed and how it was calculated, the legal basis for the claim, a specific deadline, and what you will do if they do not comply.
Can I send multiple letters of demand?
Yes, but diminishing returns. If the first letter is ignored, a second with a shorter deadline and a clearer escalation threat (e.g. “I will file a NCAT application on [date]”) can be effective. After that, escalate rather than send more letters.
Do I need a letter of demand before filing at a tribunal?
Most Australian tribunals require — or strongly expect — evidence that you attempted to resolve the dispute directly before filing. A letter of demand is the clearest way to demonstrate this.
Can the other party sue me for sending a letter of demand?
No — sending a properly drafted letter of demand is a lawful exercise of your legal rights. You cannot be sued for it. However, a letter making false statements or threatening actions you have no right to take (e.g. threatening criminal charges as leverage) could create problems.
Get your letter of demand generated and sent — $97
How much should I claim in my letter of demand?
Claim the total amount owed — principal debt, interest (if contracted or statutory), and any provable consequential losses. Do not inflate your claim; courts and tribunals take a dim view of grossly exaggerated demands and it can undermine your credibility.
Does a letter of demand need registered post?
There is no universal legal requirement to use registered post. However, tracked email delivery (as Claim Done uses) or registered post creates proof of service — important if you later need to show a tribunal that the other party received your demand.
What is the standard deadline in a letter of demand?
14 days is the standard demand period in Australia for most debt recovery matters. For urgent situations, 7 days is common. Tribunals generally expect you to have given reasonable notice before filing — 14 days satisfies this in virtually all states.
Can the other party ignore a letter of demand?
They can choose not to respond, but this works in your favour. A formal, documented demand that was ignored is strong evidence in any subsequent tribunal proceedings. It demonstrates you made every reasonable effort to resolve the matter before escalating.