A demand letter is a formal written notice asserting a right, stating a breach or noncompliance, and requiring the recipient to perform an obligation—most commonly to pay a sum of money, deliver property, comply with a contract, or cease harmful conduct—within a specified period. In Philippine practice, demand letters are used both as a practical settlement tool and as a legal step that can affect remedies, interest, penalties, and the timing of default (“delay” or mora).

This article explains when a demand letter should be sent, what it should contain, how it should be delivered, and how it interacts with key Philippine concepts like mora, damages, interest, estafa risk, and pre-suit requirements in specific contexts.

1) What a Demand Letter Is (and What It Is Not)

A. Core functions

A Philippine demand letter typically serves four functions:

Notice: It informs the recipient of the obligation and the alleged breach or nonperformance.
Formal demand: It requires performance by a certain deadline.
Position statement: It lays out facts and legal basis to frame negotiations and future litigation.
Record-building: It creates documentary evidence that demand was made, and that the recipient received it.

B. It is not automatically a “case”

Sending a demand letter does not file a case, commence a lawsuit, or guarantee a favorable outcome. It is a pre-suit step that may help avoid litigation or strengthen a later case.

C. It can be lawyer-drafted or self-drafted

There is no legal requirement that a lawyer must sign a demand letter. However, lawyer-drafted letters often carry more weight, use precise language, and avoid pitfalls (like defamatory statements or threats that backfire).

2) Why Demand Matters in Philippine Law: Mora (Delay) and Legal Consequences

A. Demand and default

Under Philippine civil law principles, a debtor is generally considered in default (mora solvendi) only after a demand has been made, unless the law or contract provides otherwise. Default matters because it can trigger:

entitlement to damages,
accrual of interest (depending on the basis),
enforcement of penalty clauses,
liability for losses and risk in certain obligations,
stronger ground to terminate or rescind in some settings.

B. When demand is not required

Demand is not always a prerequisite to default. Demand may be unnecessary where:

the obligation or contract states that the debtor is in default upon failure to perform on a fixed date without need of demand (“without need of demand,” “automatic default,” “time is of the essence” provisions);
the nature of the obligation makes performance on time the controlling consideration (time-sensitive obligations);
demand would be useless or impossible (e.g., the debtor has clearly repudiated the obligation or made performance impossible);
the law specifically provides otherwise for certain obligations.

Even in these situations, sending a demand letter may still be strategically valuable because it documents the creditor’s position and attempts at settlement.

3) When to Send a Demand Letter

A. Send it as soon as there is a clear breach or nonpayment

A demand letter is typically sent when:

a payment is overdue (loan, sale, services, rent, amortization, reimbursement);
a contract obligation is not performed (delivery not made, work not completed, warranty not honored);
property is being withheld (return of deposits, return of items, turnover of title);
a party must stop harmful conduct (nuisance, encroachment, harassment, IP infringement—subject to careful handling);
a party must correct a defect (construction punch list, defective goods).

Delay in sending a demand can weaken urgency and sometimes complicate calculations of interest/damages tied to default.

B. Send it after you have organized your proof

You do not need a complete “trial bundle,” but before sending a demand letter you should have, at minimum:

the contract or agreement (or evidence of the transaction),
proof of performance on your part (delivery receipts, invoices, messages, bank transfers),
proof of breach/nonpayment (past-due schedules, bounced checks, refusal messages),
a clear computation of the amount demanded.

C. Consider sending earlier if you anticipate concealment or dissipation

If there is a risk the recipient will hide assets, disappear, or dispose of property, an early, firm, well-documented demand can support later provisional remedies (where legally available and justified). However, aggressive language can also prompt evasion—tone should match strategy.

D. Use staged demands for commercial relationships

For ongoing relationships, a two-step approach is common:

Friendly reminder / statement of account (short deadline).
Formal demand letter (final deadline; indicates next steps).

This preserves business goodwill while still creating a record.

E. Special timing considerations in common contexts

1) Loans and promissory notes

If payments are missed, send a demand referencing the promissory note and any acceleration clause.
If there are post-dated checks, handle carefully: the presence of checks can implicate separate remedies, but the demand should not misstate criminal liability.

2) Leases (residential/commercial)

Demand should identify arrears (rent, utilities, penalties if any) and require payment and/or vacating, depending on contract and law.
Avoid self-help eviction; emphasize lawful process.

3) Construction and services

Demand should cite milestones, punch lists, defects, and the remedy sought (completion, repair, refund, liquidated damages if agreed).

4) Consumer transactions

Demand should be straightforward, include proof of purchase and defect, and propose a remedy (replacement/refund/repair).

4) What to Include: The Essential Contents of a Philippine Demand Letter

A demand letter should be complete enough to stand on its own as evidence, while remaining accurate, restrained, and professional.

A. Heading and basic identifiers

Date
Recipient’s complete name and address
Sender’s complete name and address
Subject line (e.g., “FINAL DEMAND FOR PAYMENT” / “DEMAND TO COMPLY WITH CONTRACT”)

B. Clear statement of relationship and transaction

Identify how the parties are connected (buyer/seller, lender/borrower, lessor/lessee, contractor/client).
Identify the agreement: written contract date, OR oral agreement terms, OR series of communications.

C. Chronology of material facts

Write in a clean timeline:

what was agreed;
what you performed (or paid/delivered);
what the recipient failed to do;
what reminders were made (optional but helpful);
current status (overdue since when, defects discovered when, refusal when).

Avoid exaggerations. Do not include irrelevant accusations.

D. Specific demand and deadline

The demand must be unambiguous:

What you want: pay ₱X; deliver Y; return property; repair within X days; vacate; stop doing Z.
When: a clear deadline (e.g., “within five (5) calendar days from receipt” or a specific date).
Where/How: payment channel, bank details, address for turnover, scheduling instructions.

E. Itemized computation (for money demands)

Include a table-like enumeration (even as text):

Principal amount
Interest basis (contractual or legal; specify rate if contractual)
Penalties/liquidated damages (if contract provides; cite clause)
Other charges (if contract provides; be careful with unconscionable add-ons)
Less payments made / credits
Net amount due as of a specific date
Daily accrual (optional)

If you are uncertain about a component, do not invent it. Demand what you can support.

F. Legal basis (brief, not a full memorandum)

Philippine demand letters often cite:

the contract clause(s);
general civil law principles: obligation to pay/perform; consequences of breach; damages;
relevant special laws (only if clearly applicable).

Keep citations accurate. Over-citing or mis-citing reduces credibility.

G. Proof references and attachments

List attachments:

contract/promissory note
invoices/receipts
delivery receipts
screenshots of messages (if relevant)
statement of account
bank deposit slips
acknowledgment receipts

Attach only what is helpful. Reserve sensitive documents if not necessary.

H. Reservation of rights / next steps (without improper threats)

Common, acceptable language:

“Failure to comply will constrain us to pursue all appropriate legal remedies available under law, including the filing of the proper civil action, without further notice.”

Avoid stating as a certainty that the recipient “will be jailed” or “will be arrested.” Criminal liability depends on elements that must be proven and is not automatic.

I. Contact and settlement channel

Provide:

authorized contact person
phone/email
office address
preferred time for conference

J. Signature and authority

Sign above printed name.
If the sender is a company: include position and company name; attach board/secretary’s certificate if needed later, but not necessarily to the letter.

5) Tone and Drafting: What to Say and What Not to Say

A. Be firm, factual, and professional

A demand letter is often read by a judge later. Write as if it will be an exhibit.

B. Avoid defamatory statements

Alleging “fraud,” “scam,” “thief,” or similar language without proof can create risk (civil and, in some cases, criminal complaints). Describe conduct instead: “failed to pay despite repeated reminders,” “refused to return the item,” “did not deliver as agreed.”

C. Avoid coercive or unlawful threats

Threats of violence, public shaming, or unlawful exposure can undermine your position and create counterclaims. Keep “next steps” confined to lawful remedies.

D. Don’t overstate your case

Do not claim rights you do not have (e.g., claiming ownership without documentation, adding “interest” with no basis, imposing penalties not in the contract). If a component is contestable, present it as your position, supported by your documents.

6) How Long Should the Deadline Be?

There is no single statutory deadline for demand letters. The deadline should be reasonable given the obligation.

Common practice:

3–5 days: straightforward overdue amounts, return of property, urgent compliance.
7–15 days: larger amounts, need for internal approvals, or complex compliance.
30 days: where industry practice or contract suggests longer cure periods.

If the contract contains a cure period, follow it.

Use “calendar days” vs “business days” intentionally, and anchor to receipt.

7) How to Serve the Demand Letter: Delivery That Can Be Proven

The value of a demand letter increases dramatically when you can prove receipt.

A. Best practices in Philippine setting

Personal service with signed acknowledgment (name, date, time, signature, ID if possible).
Registered mail with registry receipt and return card (or proof of delivery).
Courier with tracking and proof-of-delivery showing the recipient’s name/signature.
Email as supplementary proof, especially if the parties regularly communicated by email.
Messaging apps (e.g., Viber/WhatsApp/Messenger) can support notice, but are usually best as supplemental evidence rather than the sole method, unless the relationship is primarily conducted there.

B. Addressing “refusal to receive”

If the recipient refuses receipt, document it:

process server affidavit or witness statement;
courier notation “refused”;
contemporaneous messages confirming refusal.

Refusal does not necessarily defeat notice if properly documented.

8) Demand Letters and Interest, Penalties, and Damages

A. Contractual interest and penalties

If the contract provides for interest or penalties:

cite the clause;
compute clearly;
avoid compounding unless expressly allowed or legally supportable.

B. Interest without stipulation

Where there is no stipulation, interest and damages may still be claimed under Philippine civil law principles depending on the nature of the obligation and proof of default. This is one reason demand matters: it helps define when default begins.

C. Attorney’s fees

Attorney’s fees are not automatically recoverable just because you hired a lawyer. They generally must be:

stipulated in the contract; and/or
awarded by the court under recognized grounds.

A demand letter may include attorney’s fees only if there is a contractual or legal basis. If you include it, keep it reasonable and properly anchored.

9) Demand Letters and Criminal Exposure: Estafa and Bouncing Checks (Practical Notes)

Demand letters are often used in situations involving checks, alleged deceit, or non-delivery. It is crucial not to misstate criminal law. Two practical points:

A. A demand letter is not proof of a crime

Nonpayment alone is generally a civil matter unless specific criminal elements exist (e.g., deceit at the start of the transaction for estafa).

B. Be cautious with “criminal threats”

It is acceptable to state that you may pursue “civil and other lawful remedies,” but avoid categorical statements that the recipient is “criminally liable” unless you are prepared to plead and prove specific elements.

In check-related cases, there are formal notice requirements and timelines that may matter; ensure your written notice is accurate and can be proven received.

10) Demand Letter vs. Barangay Conciliation (Katarungang Pambarangay)

In many disputes between individuals residing in the same city/municipality, Philippine law may require barangay conciliation before filing a case in court, subject to exceptions (e.g., where parties reside in different cities/municipalities, urgent legal actions, certain cases involving government entities, and other statutory exceptions).

A. Relationship with demand letters

A demand letter is not a substitute for barangay conciliation where it is mandatory. However, it can:

frame issues and amounts;
prompt settlement before barangay filing;
serve as evidence of good-faith efforts.

B. Strategy tip

If barangay conciliation is likely required, you can still send a demand letter—but craft it to encourage settlement and avoid unnecessary escalation.

11) Demand Letters in Business Disputes: Corporations, Partnerships, and Collections

A. Identify the correct legal entity

Send to the correct name:

corporation (with SEC-registered name);
partnership;
sole proprietorship (DTI name and owner).

Misnaming can create enforceability and proof problems.

B. Address authorized officers

If the debtor is a company, address:

the president, general manager, or authorized signatory;
the registered office and principal place of business.

C. Include supporting documents for corporate accounts

Attach:

purchase orders,
delivery receipts,
billing statements,
acceptance documents,
contract or service agreement.

12) Common Mistakes That Weaken Demand Letters

No clear deadline (“ASAP” is vague).
No proof of delivery (hard to prove default and notice).
Inflated or invented charges (undermines credibility).
Overly emotional accusations (creates defamation risk and distracts from the claim).
Unclear demand (mixing multiple inconsistent remedies).
Failure to identify the transaction (recipient can plausibly deny context).
Wrong party addressed (not the true debtor/obligor).
Threatening unlawful action (invites counterclaims and weakens settlement posture).

13) Demand Letter Templates and Clauses (Philippine-Style Samples)

A. Basic demand for payment (individual-to-individual)

SUBJECT: FINAL DEMAND FOR PAYMENT

Date: __________

To: ____________________ Address: _______________

Dear ___________________:

On , you received from me the amount of ₱ as [loan/payment/advance] under our agreement that you would pay the same on or before __________.
Despite the due date and my prior reminders, you have failed to pay. As of , the total amount due is ₱ computed as follows:
- Principal: ₱__________
- Total due: ₱__________

Accordingly, I hereby demand that you pay the total amount of ₱__________ within ____ (__) calendar days from your receipt of this letter, through [cash/bank transfer] to [details] or at [address].

Failure to comply within the stated period will constrain me to pursue all appropriate legal remedies available under law, without further notice.

Sincerely,

Name / Address / Contact

B. Demand to comply with contract (delivery/performance)

SUBJECT: DEMAND TO COMPLY WITH CONTRACTUAL OBLIGATIONS

State the contract date, obligations, breaches, and require performance with a defined schedule; include cure period; reserve rights to claim damages/liquidated damages per contract.

C. Demand for return of property / turnover

Identify the property with specificity (brand, serial number, description), basis for possession, and place/time for return; include warning that continued withholding may give rise to appropriate actions.

14) Practical Checklist Before Sending

Correct legal names and addresses
Clear description of transaction/contract
Timeline of key events
Specific remedy demanded (pay/perform/return/cease)
Clear deadline tied to receipt
Accurate computation with basis for each item
Attachments prepared and listed
Delivery plan with proof of receipt (registered mail/courier/personal)
Tone is factual and non-defamatory
Reservation of rights phrased lawfully

15) What Happens After You Send It

A. Possible outcomes

Immediate payment/compliance
Negotiation and settlement terms
Partial payment and restructuring
Refusal or non-response
Counter-demand or dispute of facts

B. Record everything

Keep:

proof of service and receipt,
all replies,
settlement discussions (ideally in writing),
updated computations.

If the matter proceeds to barangay conciliation, mediation, or litigation, your demand letter and proof of receipt often become foundational exhibits.

16) Key Takeaways

A demand letter is a legal and strategic tool that can establish notice, trigger default in many situations, and set the stage for settlement or litigation.
In the Philippines, proof of receipt is as important as the content.
The best demand letters are accurate, well-documented, specific in remedy and deadline, and firm without defamatory or unlawful threats.
Even when demand is not strictly required to place a party in default, sending one often strengthens your position and clarifies issues early.