I. Concept and Function in Philippine Practice

A demand letter (often called an extrajudicial demand) is a written notice sent by a creditor/claimant to a debtor/respondent requiring the latter to pay, deliver, do, or cease and desist from a specified act. While commonly associated with debt collection, the demand letter is broader: it is used for breach of contract, lease violations, damage claims, refunds, support, property turnover, and other disputes.

In Philippine legal practice, a demand letter typically serves four core purposes:

To place the other party in default (delay / “mora”) when the law requires demand before liability for delay attaches (Civil Code, Art. 1169).
To preserve and strengthen claims for damages, interest, and attorney’s fees, and to show good faith and reasonableness.
To interrupt prescription (the running of the prescriptive period) through a written extrajudicial demand (Civil Code, Art. 1155).
To satisfy pre-suit requirements in specific actions where demand is a condition precedent (most notably unlawful detainer/ejectment under Rule 70 of the Rules of Court).

A demand letter is not automatically required for every case, but it is often strategically important because it creates a paper trail of the claim, the computation, and the requested remedy.

II. Legal Effects of a Demand Letter

A. Default (Delay) and Accrual of Damages/Interest

Under Civil Code, Article 1169, a party is generally considered in delay only from the time the obligee judicially or extrajudicially demands fulfillment. Once in delay, the defaulting party may become liable for damages under Civil Code principles (e.g., Arts. 1170, 2200, 2201, 2209), subject to the nature of the obligation and proof.

Practical effect: A clear demand letter can mark the date from which delay damages and (where applicable) interest may be claimed.

B. Interruption of Prescription

Civil Code, Article 1155 provides that prescription is interrupted by:

the filing of an action in court,
a written extrajudicial demand, or
a written acknowledgment of the debt/obligation.

Practical effect: A properly documented demand letter can prevent a claim from lapsing by interrupting prescription—provided it is truly a written demand and can be shown to have been sent and (ideally) received.

C. Evidentiary Value and Litigation Posture

A demand letter can:

show the claimant’s attempt to resolve the matter without litigation;
demonstrate clarity of the obligation, breach, and remedy sought;
support claims for attorney’s fees in proper cases (Civil Code, Art. 2208), especially where refusal to comply compelled litigation; and
undermine defenses based on surprise, lack of notice, or misunderstanding of the claim.

III. When Demand Is Mandatory vs. Merely Advisable

A. Common Situations Where Demand Is Effectively a Requirement

Unlawful detainer / eviction (Rule 70, Rules of Court) In unlawful detainer (e.g., nonpayment of rent, violation of lease conditions, expiration/termination of lease), prior demand is generally required—either:
- demand to pay and vacate, or
- demand to comply and vacate, or
- notice of termination + demand to vacate, depending on the ground.
Obligations where the contract or law contemplates demand as a trigger Some obligations are structured so that the duty becomes enforceable or the breach becomes actionable only after demand (e.g., “payable upon demand” obligations).

B. Situations Where Demand Is Usually Advisable (Even If Not Strictly Required)

Collection of sum of money (loans, receivables, unpaid invoices)
Breach of contract (services, supply agreements, construction, delivery obligations)
Claims for damages (property damage, negligence, indemnity)
Refund/return disputes (subject to contract terms and applicable statutes)
Corporate disputes involving payment/turnover obligations

IV. Essential Contents of a Demand Letter (Philippine Legal Context)

A demand letter is strongest when it is specific, provable, and internally consistent. The “essential contents” vary by dispute type, but the following are the standard core elements used in Philippine practice.

A. Formal and Identification Components

Date and place of the letter
Complete name of sender/claimant and capacity (individual, corporation, lessor, supplier, etc.)
Complete name of addressee/respondent and capacity (debtor, lessee, contractor, employer, etc.)
Complete address of the addressee (use last known address and/or contractual notice address)
Subject line (e.g., “FINAL DEMAND FOR PAYMENT,” “DEMAND TO PAY AND VACATE,” “DEMAND TO COMPLY,” “NOTICE OF RESCISSION/TERMINATION AND DEMAND”)

B. Factual Statement and Basis of the Obligation

Background facts in chronological order:
- what agreement/relationship exists,
- key dates (contract date, delivery dates, due dates, violation dates),
- what performance was expected and what actually happened.
Document references (attach or cite):
- contract/lease/PO/invoice/acknowledgment receipts,
- statements of account,
- emails/messages confirming terms,
- demandable schedules (amortizations, billing statements).

Best practice: Identify the specific provision breached (contract clause) or the basis of liability (loan, invoice, lease term, damage event).

C. The Demand Itself (Clear, Unequivocal, and Actionable)

A demand letter must contain an unmistakable command to do a defined act:

For money claims: “Pay the total amount of ₱___”
For performance: “Deliver ___,” “Repair ___,” “Return ___,” “Turn over possession of ___”
For cessation: “Cease and desist from ___,” “Remove/stop ___”

Avoid vague phrasing. The demand should not read like a “request”; it should read like a formal notice.

D. Amount and Computation (For Monetary Demands)

Include:

Principal amount (and currency)
Itemization (e.g., unpaid rentals by month, invoice numbers, delivered items)
Interest/penalties, if claimed:
- contractual interest/penalty: cite the clause; attach schedule
- interest as damages for delay: commonly anchored on Civil Code principles (e.g., Art. 2209) once default attaches
Attorney’s fees and costs, if claimed:
- if contractual, cite the clause
- if not contractual, assert basis (refusal compelled litigation) without overstating
Total amount due as of a specific date, plus a statement on daily/monthly accrual if applicable.

Philippine constraint: Under Civil Code, Article 1956, interest is not due unless expressly stipulated in writing (for loans/forbearance). Demand letters should not invent interest terms; they should either (a) rely on written stipulation, or (b) claim interest as damages for delay where legally appropriate, carefully worded.

E. Deadline to Comply (The “Cure Period”)

State:

a specific compliance deadline (date and time, where relevant), and/or
a compliance window (e.g., “within ten (10) days from receipt of this letter”).

This deadline should be reasonable given:

the nature of the obligation,
the amount demanded,
contractual notice periods,
statutory/procedural time requirements in special cases (see Part V).

F. Mode of Compliance

Specify how compliance should be made:

payment methods (bank details, checks payable to whom, payment center, reference number),
delivery/turnover location and contact person,
required written confirmation (e.g., “Provide proof of payment to ___”).

G. Consequences of Non-Compliance (Without Unlawful Threats)

Typical lawful consequences to state:

filing of the appropriate civil action for collection/damages/specific performance;
filing of ejectment (for lease disputes);
pursuit of available remedies under the contract (termination/rescission if permitted);
recovery of interest, damages, and litigation costs where warranted.

Avoid language that could be construed as extortionate or defamatory. Keep it within lawful remedies.

H. Reservation of Rights and “Without Prejudice” Language

Common clauses:

“This demand is without prejudice to other rights and remedies available under law and contract.”
“All rights are reserved.”
Optional: “This letter is sent in good faith to resolve the matter amicably.”

I. Signature and Authority

signature of the claimant or authorized representative
printed name and position (if corporate)
attach Secretary’s Certificate or proof of authority if you expect the recipient to challenge authority (common in corporate demands).

J. Attachments / Annexes

Label as “Annex A,” “Annex B,” etc. Typical annexes:

contract/lease/loan documents
invoices/receipts
statement of account
prior correspondence
proof of delivery/performance

V. Deadlines: What the Law Requires vs. What the Letter Should Set

“Deadlines” in demand letter practice fall into two categories:

Deadlines you set (a cure period to pay/comply), and
Deadlines imposed by law or procedure where demand/notice affects enforceability, jurisdiction, or prescription.

A. Setting the Deadline in the Letter (General Rule: Reasonableness)

Philippine law does not impose a universal cure period (e.g., “always 7 days”). The demand letter should set a period that a court would view as reasonable under the circumstances.

Common practice ranges:

3–5 days: urgent compliance, small amounts, straightforward obligations, perishable issues
7–15 days: typical commercial collections, lease cures, invoice disputes
30 days: complex performance obligations, high-value disputes requiring internal approvals

A short deadline is not automatically invalid, but it can be criticized as unreasonable depending on context.

B. Ejectment (Unlawful Detainer): Special Procedural Waiting Periods

For unlawful detainer (Rule 70, Rules of Court), a prior demand to pay/comply and vacate is generally required, and procedure recognizes waiting periods commonly applied in practice:

15 days for demands involving land, and
5 days for demands involving buildings,

counted from the last demand to pay/comply and vacate before filing the ejectment case.

Additionally, the one-year period to file an unlawful detainer action is generally counted from the last demand to vacate (or last notice of termination combined with demand), making the demand letter date crucial.

Practical takeaway: In lease disputes, the demand letter should be drafted with Rule 70 requirements in mind—clear demand to pay/comply and to vacate, with proper service and proof of receipt.

C. Bouncing Checks (B.P. Blg. 22): The “5 Banking Days” Rule After Notice of Dishonor

In cases involving B.P. Blg. 22 (Bouncing Checks Law), “demand letter” practice overlaps with the legally significant notice of dishonor:

The drawer’s knowledge of insufficient funds is strongly supported if, after receiving notice of dishonor, the drawer fails to pay or make arrangements within five (5) banking days.

Practical takeaway: For check-related disputes, the letter should be framed and served as a notice of dishonor and demand with reliable proof of receipt because the timeline is legally meaningful.

D. “Payable on Demand” Obligations: Cause of Action May Start at Demand

For obligations expressly payable upon demand, the creditor’s right to sue may effectively arise only upon:

demand, and
refusal or failure to pay.

Practical takeaway: In such cases, the date and provability of the demand letter can determine when default begins and when prescription starts running.

E. Prescription and Interruption: Timing Strategy Under Civil Code Article 1155

Since a written extrajudicial demand can interrupt prescription (Art. 1155), timing matters:

If a claim is nearing its prescriptive deadline, sending a written demand with proof of dispatch/receipt is a common risk-control step.
However, repeated demands do not guarantee indefinite extension in every scenario; prescription analysis depends on the specific cause of action and applicable prescriptive period.

Practical takeaway: The demand letter should be sent early enough to allow compliance but not so late that prescription becomes a risk.

F. Contractual Notice Periods (Often Controlling)

Many Philippine contracts (leases, supply agreements, construction contracts, loan agreements) include:

notice provisions (where/how to send notices),
cure periods (e.g., “10 days to cure breach”),
default definitions.

Practical takeaway: A demand letter deadline should align with the contract’s cure period and notice mechanics; otherwise, the sender may weaken later termination/rescission or default claims.

VI. Service and Proof of Receipt: Making the Demand Legally Useful

A demand letter is only as strong as your ability to prove it was sent and (ideally) received.

A. Common Service Methods

Personal service with acknowledgment receipt (signature, date, name, ID)
Courier with tracking and proof of delivery
Registered mail with registry receipt and return card (or equivalent proof of delivery/attempt)
Email (useful when the contract recognizes email notices or where prior dealings show email as an accepted channel), ideally with:
- sent logs,
- read receipts (not conclusive),
- follow-up sending by courier/registered mail for redundancy.

B. Addressing and Correct Party

Send to:

the contractual notice address if stated;
the registered address for corporations when relevant; and
the last known address for individuals, with documentation that it is the last known.

Errors in addressee identity (wrong person/entity) are a common reason demand letters fail as evidence or as procedural prerequisites.

VII. Demand Letters and Remedies: Termination, Rescission, and Damages

A. Termination/Rescission Notices

For reciprocal obligations (e.g., sale, supply, construction), Civil Code Article 1191 governs rescission. Many contracts allow extrajudicial rescission/termination via notice upon breach, but enforceability often depends on:

the contract’s express terms,
the materiality of breach,
the opportunity to cure, and
good faith.

A demand letter may be paired with:

a notice to cure (first letter), then
a notice of termination/rescission (second letter) if breach remains uncured.

B. Liquidated Damages, Penalties, Attorney’s Fees

Demand letters should cite the contract provisions for:

penalty clauses (Civil Code, Arts. 1226–1229),
liquidated damages,
attorney’s fees, ensuring amounts remain reasonable and defensible.

VIII. Common Drafting Mistakes (and Why They Matter)

No clear demand (reads like a complaint, not a demand) → weak for default under Art. 1169
No computation or unclear amounts → invites disputes and reduces settlement likelihood
Wrong remedy language (e.g., threatening criminal action where none applies) → may backfire
No proof of sending/receipt → undermines interruption of prescription (Art. 1155) and procedural prerequisites
Failure to demand vacating in lease cases → can defeat unlawful detainer requirements
Ignoring contract notice/cure clauses → may invalidate or weaken termination/default posture
Overstating interest or fees without basis (e.g., interest not in writing under Art. 1956) → exposes the demand to challenge

IX. Practical Structure (Standard Philippine Format)

A well-formed demand letter commonly follows this sequence:

Heading/Date/Addressee/Subject
Statement of relationship and obligation
Statement of breach/default
Demand + itemized computation
Deadline (from receipt) + payment/performance instructions
Consequences and reservation of rights
Signature + authority + annexes
Service method and proof (kept by sender, not necessarily in the letter body)

X. Core Takeaways on “Essential Contents and Deadlines”

The essential contents are those that make the demand identifiable, provable, computable, and enforceable: correct parties, factual basis, clear demand, precise amounts/acts, deadline, and lawful consequences.
The deadline you set should be reasonable and consistent with contractual cure periods.
Some disputes have legally meaningful timing rules linked to demand/notice—especially ejectment (Rule 70) and bouncing checks (B.P. 22).
Proof of service is not a formality; it is what turns a demand letter into an effective tool for default, prescription interruption, and procedural compliance.