If you’re a contractor having trouble obtaining payment for completed work from an owner, a demand letter could be exactly what you need. Depending on the situation, a demand letter may be more appropriate than a lawsuit. Sending a demand letter rather than pursuing litigation against a business partner as a first course of action can even help preserve your reputation.
Read on to learn about the benefits of having a Houston contractor attorney from Cotney Law draft a demand letter for you.
1. Can Result in Payment
The ultimate goal is to get you the money you’re owed. A demand letter written by an attorney lets the project owner know you are serious about collecting payment and will persevere until you get compensated fairly. To impress the gravity of the situation on the owner, your attorney can add references to specific laws and contractual obligations that were not upheld. This may be all that’s needed to recover funds owed to you.
2. Saves Time and Costs
If you’ve spoken in person or on the phone to a nonpaying project owner, the situation can get heated and convoluted quickly. Before you know it, you’ve lost half a day to arguing without gaining any traction. A letter gives you the time and separation to state your case cooly and logically.
Having an attorney draft the demand letter shows that you are prepared if further action is necessary, and that’s often all it takes. Using courtesy and professionalism, your attorney will create a calculated, diplomatic demand letter as a means to an end. Taking the demand letter as a stepping stone instead of skipping ahead to a lawsuit has another upside too: drafting a demand letter takes less time and costs less than a lawsuit. That’s time back that you can use to work on paying projects.
3. Establishes Documentation
If there’s still no sign that the project owner is going to pay you, a demand letter can be used as an exhibit during litigation to prove that you provided notice. Drafting a letter also encourages the nonpaying party to write you back, providing further documentation. Sending the letter through certified mail with return receipt requested is another way to add to your evidence to prove that the project owner knows you made an effort to resolve the payment issue before litigating.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.