Once a contract is signed between the two parties, they are legally bound to adhere to the terms of that agreement. It is illegal and unprofessional to be in breach of the contract. The affected party can take legal action against the party in violation to enforce other forms of compensation or terms of the agreement.
In such scenarios, the offended party needs to alert the party in breach by sending them a breach of contract letter.
A breach of contract demand letter identifies the individual that has failed to honor the terms of the agreement. The letter also indicates the party that breached the agreement, the date of the occasion, and the specific action performed by the guilty party.
The letter indicates in detail how the party is not fulfilling the terms of the agreement. It is advised that you address the breach of contract in person before sending it out to the involved party. If you can solve the problem through a discussion, go for it. This will save money and time.
A breach of contract demand letter has two objectives: to request the other party to fix the problem or terminate the contract altogether. In either case, the violating party must respond to the breach of the contract demand letter and give their side of the story.
Notice of Breach: What to Include
Discussed below is what you need to include in a ‘breach of contract demand letter’.
- Mostly, contracts contain a notice clause that indicates how one should communicate to the breaching party. The notice might be sent through various channels like email or fax. Failure to adhere to these guidelines, the breach of contract demand letter might not be legally binding.
- Ensure that the breach of a contract demand letter is sent to the right individual — it should be that who signed the contract. Furthermore, make sure that the breach of a contract demand letter is sent through a proper channel.
- Ensure it is a material breach: There is always evidence for any violation. You should, however, put in mind that courts only validate material evidence. In cases where the matter ends up in court, you need to have sufficient evidence. This is why you should always ensure that you have material evidence before issuing a notice.
- The date is significant because it is the official record of when the breaching party was officially told of the breach. The date could be necessary if the dispute goes to court.
- The breach should be described. This usually means clearly stating precisely what section of the contract was breached.
- Offer a cure: There are some situations where it might be too late to fix a problem. In such cases, the purpose of the notice will be to terminate the contract. In most cases, however, breach of contract notices are issued to solve challenges in respect to terms of the agreement.
The response to a notice of breach
Below are some of the responses to expect after sending your breach of the contract demand letter.
- The party in breach may respond that they are not in violation of the contract. The affected party should be careful about how they respond in case the other party is correct.
- The breaching party might not respond to the breach of contract demand letter. Legally, you have to wait for around two weeks before following up with another letter. The second letter should refer to the first one.
- The breaching party might agree that they made a mistake. In that case, the affected party has an opportunity to resolve that matter amicably.
- The party in breach requests a meeting to find possible solutions to the problem. As much as it might be an excellent way of dealing with it, you need the guidance of an attorney.
How to Write a Demand Letter
The following are the steps to write a breach of contract demand letter:
Indicate the date
The primary function of demand notices is to indicate the date the information was issued. This is very important to mention the date in the breach of the contract demand letter, especially if the matter ends up in court. So, before giving the notice, always ensure that the data is accurately written. Furthermore, make sure that you are issuing the notice to the right person through a proper channel.
Describe the breach in detail
In your notice, you must indicate which part of the contract was breached. There are three instances that a breach can happen: the other party fails to meet the terms of the agreement, the other party says it will not meet its obligations in the future, or the other party is making it impossible for you to meet the terms of the agreement.
Sample Letters and Templates
Here are editable breach of contract demand letters and templates that are free to download:
Frequently Asked Questions
How do you write a breach of contract demand letter?
Remember to indicate which clause in the contract has been breached. The breach of contract demand letter should therefore describe in detail how terms were violated by the other party.
What happens if you are in breach of contract?
Legal action can be taken against you. You might be asked to pay for the damages caused. In some cases, the affected party might approach the party in breach of a discussion
Are the demand letters confidential?
Yes, demand letters are confidential and should only be addressed to the person in breach of contract. This is important because they can be used in court proceedings as evidence.
How do you write a letter threatening legal action?
State the reasons why you consider taking legal action. Remember to indicate what the other party can do to prevent such actions from being taken.