The article discusses about demand letter for breach of contract in the United States. When parties find themselves in a contract dispute because they believe the other party is not complying with the contractual obligations, providing a notice of breach is usually the first formal step in resolving the issue. The notice generally takes the form of a letter – sometimes referred to as a “demand letter”.
The demand letter normally explains that one party believes that the other party failed to perform the contract. Some demand letters lay out a very detailed course of action and timetable for the alleged breaching party, and others are less specific serving primarily as an invitation to perform. When drafting a demand letter breach of contract, one must determine and take into consideration several aspects, which we discuss further in detail.
An important aspect when drafting a demand letter breach of contract is the date. The non-breaching party should create a clear record of the date when the breaching party is informed about the breach through the demand letter. The date could be an important key if the dispute is taken to court. When sending the demand letter, the non-breaching party should make sure that the notice ends up with the right person and that is send through a proper method.
Another important aspect is for the non-breaching party to verify if the contract has any notice provision. In other words, the non-breaching party must check if the contract stipulates anything about how notices should be communicated. For instance, some contracts establish that notices have to be communicated by email, others establish that notices should be communicated through fax or mail. This is a crucial aspect because if the notice is not sent the right way, it might not be considered a demand letter. And this would only give the breaching party more time to cure the problem and deny having been put on notice of the breach.
Further, the non-breaching party should indicate in the demand letter what part of the contract was breached. The non-breaching party should indicate specifically what clause of the contract they are referring to. With regards to the clauses of the contract, normally the non-breaching party consent a demand letter for any kind of provision of the contract. However, in some cases it might be recommended that the breach is material. In this respect, courts are more in concert with the material breaches, which are actions that can destroy the value of the contract. Even if the non-breaching party could send a demand letter for a non-material breach, such breach would not normally end the agreement.
In conclusion, the demand letter breach of contract is usually a mechanism through which the non-breaching party allows the breaching party another chance and some extra time to perform the contractual obligations. A breach of contract notice seeks to resolve contractual problems while keeping the agreement in effect. For these reasons, usually the demand letters give the breaching party a period of time during which they can cure the breach. Most contracts include a standard cure period clause of 30 days.
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