Receiving a demand letter can feel like a punch in the gut , it can be sudden, urgent, and full of legal words that make your head spin. Breathe. A demand letter is usually a warning shot, not an immediate death sentence. With the right steps you can protect your rights, limit exposure, and often fix the problem without going to court. Below is a human, practical, step-by-step guide you can follow the moment that envelope (or email) arrives.
What a demand letter is (in plain language)
A demand letter is a formal written request from a person or their lawyer asking you to do something. It is usually pay a debt, stop an activity, return property, or remedy a breach and warning that legal proceedings may follow if you don’t comply. Most demand letters set a deadline and outline the consequences if nothing happens.
Immediate steps (do these right away)
1. Stop – don’t panic.
Read the letter carefully. Note the sender, the amount or issue complained about, the deadline, and what they say they will do if you don’t act.
2. Preserve the evidence.
Keep the original letter/email, save screenshots, preserve related contracts, invoices, messages, bank records and any prior correspondence. Digital files should be copied to a secure folder, never delete anything.
3. Check timelines and deadlines.
Many demand letters ask for payment or action within a fixed time. It is common for demand letters in Nigeria to give short periods (for example, 21 days) to comply before court action is threatened. Treat any deadline seriously.
4. Do not ignore it.
Ignoring a demand letter removes opportunities to negotiate and may make it easier for the sender to escalate to court. Even if you disagree with the claim, a measured written response or seeking legal advice is usually wiser than silence.
What you should check next (numbered for clarity)
1. Is the claim valid? Check the contract, invoices, delivery notes, receipts, or policy terms.
2. Has the statute of limitations run? Under Nigerian law many simple contract claims must be brought within six years from when the cause of action arose (some claims and states vary). If the claim is old, that may affect options. (But don’t rely on limitation alone, ask a lawyer.)
3. Is there an agreed dispute resolution process? Contracts often require negotiation, mediation, or arbitration first. If so, the creditor may be obliged to follow that process before suing. Check your contract.
4. Is this a precursor to insolvency/forced recovery? For corporate debt, some statutory regimes require specific demand formats before insolvency processes are started treat such notices as high priority.
Why you need a lawyer.
A lawyer will:
- Check whether the demand is valid and time-barred.
- Prepare a precise, protective response.
- Negotiate or mediate on your behalf
- Prepare a defence if the matter proceeds to court.
In many Nigerian courts, demonstrating you attempted pre-action mediation or negotiation is taken seriously and can influence costs and directions.
Sources & further reading
- “What is a demand letter” — Investopedia
https://www.investopedia.com/terms/d/demand-letter.asp - Practical demand letter precedent and common 21-day demand form — NigerianLawGuru
https://www.nigerianlawguru.com/wp-content/uploads/2024/06/LETTER-OF-DEMAND-SIMPLE-DEBT.pdf - Limitation periods (simple contracts — commonly six years) — Templars / Lagos Limitation Law summaries.
- Pre-action / Civil Procedure Rules (expectation of attempts to settle) — Lagos State Civil Procedure Rules.
- Practical consequences and enforcement (debt recovery / committal) — debt-recovery overviews.