Letter of demand for unpaid invoices: options and next steps
Updated: 2 days ago
An unpaid invoice calls for a practical decision: what supports the claim, what is disputed and whether recovery is commercially worthwhile. BEZLAW helps businesses, professionals and individuals in George and the Southern Cape assess their position before choosing a route.
Why should you consider drafting and sending a Letter of Demand before proceeding with legal action when someone owes you money?
The primary purpose of a demand is to inform the defendant that the plaintiff has a cause of action against him or her, and to persuade him or her to settle the claim, or to remove the cause of complaint within a stated time so as to avert formal proceedings from being instituted.
A demand sets out the claim and asks the other party to respond. The next step depends on the response, the agreement and the practical merits of proceeding.
If the other party performs in terms of the demand then the dispute is resolved quickly, without the costs of commencing legal proceedings and the costs of litigation.
It proves to show to the court that you have taken reasonable steps to resolve the dispute, before instituting the proceedings.
It shows a legal basis for your claim and the issues in dispute which letter can be placed before the Court.
It can be helpful to prove the weight of your claims against the debtor and can be used as extra evidence.
In certain instances, a letter of demand is necessary to place the debtor in mora. For example, in the event where parties failed to specify a performance date or period.
In some instances a letter of demand is necessary to institute legal actions such as in terms of the Institution of Legal Proceedings against certain Organs of State Act 40 of 2002, in terms of section 129 of the National Credit Act 34 of 2005, in terms of Section 98 of the Customs and Excise Act 91 of 1994, to name just a few.
Interest and legal costs should be assessed against the agreement, the applicable law and the facts before proceedings are considered.
We assess the documents, the debtor's response and the commercial practicality of recovery before recommending further action. A demand or judgment does not guarantee payment.
Discuss the appropriate next step before sending a demand or starting proceedings. The right approach depends on the documents and circumstances.
This article does not constitute legal advice.
Arrange a consultation to discuss the documents, recovery options, risks and costs.
Alternatively, contact us here:
Prepare for your consultation
Prepare the agreement or accepted quotation, invoices and statement of account, proof of delivery or performance, and correspondence with the debtor. A short chronology helps us identify the issues and discuss risks, costs and next steps.
Discuss your matter with BEZLAW
We explain your position, practical options, risks and the proposed next step. Consultation and further work are subject to agreed scope and fees.
Practical legal strategy. Clear advice. Real outcomes.
General information only. Advice on an individual matter depends on its facts and documents. No outcome is guaranteed.
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