Short answer: A demand letter is a written request to pay money or fix a problem by a deadline, before a lawsuit is started. It often works because it shows you are serious and sets out the claim clearly. It does not stop the two year limitation period, so do not let the letter delay a claim that is close to its deadline.
Why demand letters work
Many disputes stall because the other side is not sure you will act. A clear, specific letter changes that. It sets out what is owed and why, gives a deadline and explains what will happen next. It also creates a record that the court can look at later, including when deciding interest and costs.
What to include
- who you are and the relationship with the recipient: customer, contractor, landlord, borrower
- the facts in short, dated points
- the legal basis: the contract, invoice, promise or law that creates the obligation
- the exact amount or action demanded and how it was calculated
- a reasonable deadline, often 10 to 14 days
- how payment should be made
- what you will do if the deadline passes, such as starting a claim in Small Claims Court
- copies of key documents: the contract, invoices, photos, messages
The line a demand letter must not cross
A demand letter can say you will sue. It must not threaten criminal charges or a complaint to a regulator to pressure someone into paying a civil debt. Doing so can expose the writer to serious consequences, and Ontario lawyers are prohibited from making those threats. Keep the tone factual and professional.
Should a lawyer send it?
A letter on a law firm's letterhead often gets a faster response, and a lawyer can check the legal basis, the amount and the limitation period before it goes out. For small amounts, a well written letter from you may be enough. For larger amounts, business disputes or where the other side has a lawyer, legal advice before sending is worth it.
With prejudice or without prejudice
A standard demand letter is usually written so it can be shown to the court later. Settlement offers that you do not want the court to see should be made separately and marked "without prejudice". Mixing the two can cause problems.
Limitation periods
Under Ontario's Limitations Act, 2002, most claims must be started within two years of the day you discovered, or ought to have discovered, the claim. A demand letter does not pause that clock. If the deadline is close, start the claim and continue negotiating. For claims of $50,000 or less, see our guide to Small Claims Court in Ontario.
Frequently asked questions
Is a demand letter required before suing in Ontario?
No, but it is often a good idea. It can lead to payment without a lawsuit and shows the court you tried to resolve the dispute.
How long should a demand letter give to respond?
A reasonable deadline is often 10 to 14 days, depending on the amount and the circumstances.
Does a demand letter stop the limitation period?
No. Most Ontario claims must be started within two years of discovery, whether or not a letter was sent.
Can a demand letter threaten to call the police?
No. Threatening criminal charges to collect a civil debt is improper and can expose the writer to serious consequences.
What if the other side ignores the demand letter?
You can start a claim, in Small Claims Court for up to $50,000 or in the Superior Court of Justice for larger amounts.
Talk to our team
This guide is general information, not legal advice. For advice on your situation, see our civil litigation lawyer in Toronto page. To book a paid consultation (30 minutes, $150 plus HST, paid when you book), book online or call (647) 271-1646. The phone is answered 24 hours a day, 7 days a week, and office meetings are by appointment. Civitas Law is a team of legal professionals under the leadership of lawyer Nasibeh Mehrpouyan, serving clients in English, French, Farsi, Russian and Serbian.