In the Philippine legal landscape, a Demand Letter is often the first—and sometimes only—step needed to resolve a dispute. It is a formal document sent by a party (the creditor or aggrieved party) to another (the debtor or offending party), demanding that they fulfill a legal obligation, pay a debt, or cease a specific action.
While it may seem like a mere formality, it is a potent legal tool that sets the stage for litigation or, ideally, an out-of-court settlement.
1. Why is a Demand Letter Necessary?
Under Article 1169 of the Civil Code of the Philippines, "those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation."
- Establishing Default: Without a demand, a debtor is generally not considered in "legal delay" (mora). If there is no delay, you cannot claim damages or interests in court.
- A Prerequisite for Litigation: In many cases, such as Unlawful Detainer (eviction) or Small Claims cases, the court requires proof that a formal demand was made and ignored before they will entertain the lawsuit.
- Cost-Efficiency: It signals to the other party that you are serious, often prompting them to settle to avoid the high costs and stress of a full-blown trial.
2. Essential Elements of an Effective Demand Letter
A demand letter does not need to be written in "legalese" to be valid, but it must be clear, firm, and contain the following:
| Element | Description |
|---|---|
| Heading & Date | The date the letter is written and the full name/address of both parties. |
| Statement of Facts | A brief, chronological account of why the obligation exists (e.g., a contract, a loan, or a bounced check). |
| The Demand | A specific, unambiguous request. Don't just say "pay me"; say "pay the amount of PHP 50,000.00." |
| Deadline | Provide a reasonable period for compliance (usually 5 to 15 days from receipt). |
| Consequences | A clear statement that failure to comply will result in "legal action" or the filing of civil/criminal cases. |
| Signature | The signature of the claimant or their legal counsel. |
3. How to Draft the Letter: Step-by-Step
Step 1: Identify the "Why"
State the basis of the claim. If it’s a debt, mention the date the money was borrowed. If it’s a breach of contract, cite the specific clause that was violated.
Step 2: Quantify the Claim
If you are demanding money, break down the costs. Include the principal amount, any agreed-upon interest, and perhaps a warning about attorney's fees should the matter reach court.
Step 3: Set the Grace Period
In the Philippines, "reasonable time" is subjective, but 7 to 10 days is standard. For eviction cases, the law specifically requires a 5-day notice for non-payment of rent or 15 days for other breaches.
Step 4: The Final Warning
Close with a firm "Demand to Cease and Desist" or a "Final Demand to Pay." This shows the court later that you gave the defendant every opportunity to settle.
4. How to Properly Serve the Letter
The most critical part of a demand letter is Proof of Receipt. If you cannot prove the other party received it, the letter is legally non-existent.
Option A: Personal Service
You or a representative hands the letter directly to the person.
- Requirement: Ask the recipient to sign a "received" copy with their printed name and the date/time of receipt.
- Pro-tip: If they refuse to sign, note "refused to sign" on the copy and have a witness sign that the letter was indeed delivered.
Option B: Registered Mail (Recommended)
Done through the Philippine Postal Corporation (PHLPost).
- Requirement: Keep the Registry Receipt (the small white slip).
- Crucial Step: Once delivered, request a Return Card or a Certification from the Postmaster. This is your "smoking gun" in court to prove service.
Option C: Private Couriers
Using LBC, J&T, or Grab is faster, but ensure you print the Tracking History showing the item was "Delivered" and "Received by."
5. What Happens Next?
- Compliance: The party pays or performs the act. The dispute ends.
- Negotiation: The party asks for an extension or a payment plan. If you agree, put it in writing (a Compromise Agreement).
- Silence/Refusal: If the deadline passes with no response, you are now legally cleared to file a case in the Barangay (for mediation) or directly in Court (if the Barangay step is not required).
Note on Small Claims: If your claim is for money and does not exceed PHP 1,000,000.00 (in Metropolitan Trial Courts), you can use the demand letter to initiate a Small Claims case where a lawyer is not even allowed to represent you in the hearing.
Would you like me to draft a template for a specific scenario, such as a collection of debt or an eviction notice?