The Importance of Demand Letters for Small Claims Court in New York

A demand letter is often a powerful tool for resolving disputes affordably by potentially avoiding the need to sue in small claims court. 

This article covers:

1. When you are required to send a demand letter before suing in a New York small claims court, 

2. Why it’s important to send a demand letter, and 

3. How to write a demand letter.  

A demand letter is a formal written document sent by one party to another outlining a problem and requesting a specific action to resolve the problem. Demand letters are often used to settle disputes before escalating to a lawsuit. 

Demand letters serve several key purposes:

1. Encourages Settlement: A well-written demand letter can prompt the other party to resolve the issue without the need for costly and time-consuming litigation.

2. Establishes a Record: The letter documents your attempt to settle the matter in good faith, which can strengthen your case in court.

3. Clarifies the Dispute: A demand letter clearly lays out your position, which can sometimes resolve misunderstandings.

4. Shows Serious Intent: Sending a formal letter signals that you are prepared to take legal action if necessary.

While demand letters are not always required before filing a small claims lawsuit, here are some examples of when you are required to send a demand letter:

1. Commercial Claims Arising Out of a Consumer Transaction. If you are filing a lawsuit on behalf of a corporation, partnership, LLC, PLLC or association (this is known as a commercial claim) AND the party you are suing is an individual, not a business, and the claim is about goods or services that were mainly for personal, family or household use, then you are required to send the individual a demand letter demanding payment of the outstanding amount they owe you before you sue. See CCA 1803-A, UCT 1803-A, and UDC 1803-A.  You must send the demand letter at least 10 days before you file your claim (but not more than 180 days). For example, if you are suing on behalf of a corporation because you sold a dining set to a homeowner and they filed a chargeback, you would need to send them a demand letter before suing.  When you file your lawsuit with the court, you will need to certify that you mailed a demand letter.  

2. Contract Disputes: Some contracts include clauses requiring written notice before filing a lawsuit. A demand letter is a written notice. Check your contract for this requirement. 

3. Consumer Protection Claims: Under New York’s General Business Law § 349, prior notice may be required before filing a lawsuit for certain deceptive business practices claims. A demand letter would count as prior notice. 

4. Landlord-Tenant Disputes: In cases like non-payment of rent or lease violations, landlords must often provide formal notice before filing a claim (a demand letter would be considered written notice).  Check your agreement to see if this notice is required. 

If you are not sure whether a demand letter is legally required in your case, it’s a good idea to check any contract or law that would govern your case. Even when not legally required, sending a demand letter is usually a helpful step that can lead to a resolution of the problem without further action.

There is no requirement that a demand letter be written by an attorney. However, demand letters written by attorneys tend to be taken more seriously as it signals to the other party you are serious about your case since you spent the time and money hiring an attorney to help you.  If you end up suing, you can choose to include the demand letter in your evidence packet to show the judge that you tried in good faith to resolve the dispute.   

An effective demand letter should be clear, professional, and concise. Key elements to include are:

• Your Contact Information: Include your full name, address, phone number, and email for easy communication.

• Recipient Information: Identify the recipient clearly, including their name, company (if applicable), and address.

• A Clear Statement of the Issue: Describe the facts of the dispute in a straightforward manner, including dates, amounts, and any relevant context.

• A Specific Demand for Action: Clearly state what you are seeking, such as payment of a debt, repair of a product, or fulfillment of a contract.

• A Deadline for Response: Specify a reasonable timeframe for the recipient to reply or comply, often between 10-30 days.

• Consequences for Non-Compliance: Politely state that legal action may follow if the issue is not resolved within the given timeframe.

• Supporting Evidence: Attach relevant documents such as receipts, contracts, or photographs to support your claims.

• A Professional Tone: Avoid aggressive language; maintain a firm yet respectful tone to increase the chance of a positive outcome.

Here is a sample demand letter:

Your demand letter can be simple like the one above; however, the more formal and clear you make it, the more seriously the other party will take you.

Send your demand letter via Certified Mail with Return Receipt Requested to ensure: 

1. You Meet Legal Requirements. Depending on the type of case you have, you may be required to send your demand letter using certified mail with a return receipt.  

2. Proof of Delivery. This provides a tracking number that confirms the letter was sent and delivered. The Return Receipt (green card or electronic proof) shows the recipient’s signature and the date they received it. This is crucial if they later claim they never received the letter.

3. Shows Your Attempts to Resolve the Matter. If the issue ends up in court, you can present the certified mail receipt and return confirmation as evidence that you attempted to resolve the matter before pursuing legal action.

4. Establishes a Clear Timeline. Certified or priority mail creates a recorded timeline showing when the letter was sent and received. This helps establish deadlines for the recipient to respond.

5. Seriousness. Using certified mail signals that you are taking the matter seriously, which can prompt the recipient to respond more quickly or take your demands seriously.

If your demand letter is ignored, filing a lawsuit in a New York small claims court may be the next step. Small claims courts were designed to provide an accessible and cost-effective way for individuals and businesses to resolve their disputes.

Review our guide to suing in a small claims court in New York.

Reasons why you should not delay in filing your small claims lawsuit: 

1. There are deadlines known as the statute of limitations for when you need to file.

2. As time passes, you begin to lose evidence, and a judge may begin to doubt your credibility if you waited too long to file.

3. If you provided a timeline for compliance in your demand letter, and threatened legal action if the recipient did not comply, filing the lawsuit promptly will continue to show that you are taking the matter seriously.   

Small claims courts are designed to be simpler and faster than other courts. At a small claims hearing, a judge will listen to both sides. You should bring any evidence (like receipts, photos, or contracts) that supports your case. If you win, the court will give you a judgment saying the other person owes you money or must take certain actions. Review our guide on how to prepare for small claims court.