THE DEMAND LETTER

What is a demand letter

• A demand letter is a formal notice
demanding that the addressee perform a
legal obligation, such as rectifying a
problem, paying a sum of money or
honouring a contractual commitment, on
specific terms and within a specified time
• The letter gives the recipient a chance to
perform the obligation without being
taken to court
• In certain types of legal proceedings, a
demand letter is mandatory
• Where it is pleaded a demand is required
to be made as a matter of law.
• It is a letter sent to the person who a
grievance is raised
• It is sent before the commencement of
the suit
• The letter is intended to elicit a payment
or compliance from the part of the
prospective defendant
• It serves to inform the adversary of a
pending claim
• The adversary is given a time-frame within
which a response is required
• A demand letter may be written by the
person seeking redress or by a lawyer on
that person’s behalf
• A copy is made and the original must be
sent in a way that provides proof of
delivery
• It can be sent by registered mail
• It can also be served by a registered legal
clerk
• The purpose of a demand letter and
notices prior to litigation is to afford both
parties an opportunity to avoid embarking
on unnecessary litigation or incurring
additional costs, especially within the
context of our overburdened judiciary and
the reality of a constricted economy.
• Today, it is a very important step in legal
proceedings.
• It has now become a compulsory
document with the Civil Procedure Rules,
2010 according to Order 3 rule 2(d)
Reasons for making formal demand
• It is usually advisable as per the Advocates
Practice Rules so as to avoid incurring additional
costs of suit should the claim be admitted by the
other party
• If the demand letter achieves its results,
litigation is avoided
• To avoid suits that may be vexatious or brought
out of malice.
• However, it may be preferable not to give the
debtor warning through the demand letter
especially if he’s a flight risk (to be discussed
later)
Contents of a demand letter
• A date, the recipient’s contact information,
and the legal phrase WITHOUT
PREJUDICE to protect the sender with
regard to the contents of the letter
• The authority to act for the claimant
• A summary of the matter in issue
• A demand for a specific relief or payment
• A deadline by which the matter must be
settled
• Consequences of non-adherence to the
demand of claim
• The term demand letter stated in the body
of the letter to direct the recipient to act
accordingly
What should be included in a
demand letter?
• ‘…a clear intimation that payment is
required…it must be of a peremptory
character and unconditional…’
Re Colonial Finance, mortgage &
Investment & Guarantee Corporation
Limited (1905) 6 S.R.N.S.W. 6
• Under the Law Society of Kenya Digest of
Professional Conduct and Etiquette (1982
Edn Revised 2000) on Paragraph 19, the
period a party must normally be given to
respond to a letter of demand:
• 7 days, where debtor resides in the same
town as advocate,
• Not less than 10 days, where he resides in
a different town in Kenya,
• 15 days, where he resides outside East
Africa
Note:
• A demand letter should be signed by an
advocate.
• Why?
• It is a document that is chargeable under
the Advocates (Remuneration) Order,
2009 and therefore attracts the prohibition
u/ss 34 & 35 Advocates Act, cap 16, i.e.,
not to be drawn by an unqualified person,
or remuneration thereof accepted by an
unqualified person.
• Further, signing in the name of the firm is
not sufficient as it is not safe – it may lay
the demand letter open to challenge as
not being given either by the party or by
an advocate as his representative on his
behalf.
Singh v Munshi Ram (1937) 4 EACA 9
What should not be included in a
demand letter?
• A threat that criminal proceedings would be
initiated against the debtor in event of non-
payment.
Khanbhai v O’Swald (1933) 15 KLR 53
• Letter of demand may not demand from the
debtor the costs of the advocate giving notice –
there is both a statutory and professional bar to
making such a demand
• Rule 13, Advocates (Practice) Rules
subsidiary legislation to the Advocates Act,
cap 16
• Under the Law Society of Kenya Digest of
Professional Conduct and Etiquette (1982
Edn Revised 2000) on Paragraph 19,
• But, if subsequent to the original letter of
demand, the debtor requests to be allowed to
make payment of demand sum by installments,
and these terms are accepted, then it is
permissible to add the advocate’s costs to the
principal sum owing
• This must be done at the time of accepting the
proposal of payment by installments
• This is permissible because fresh consideration is
being given by the creditor, for adding those
costs to the principal amount
Other considerations
• It must be kept in mind that the demand letter
or notice will later become highly relevant in
subsequent applications and hearings in the suit,
as well as to an assessment of the conduct of
parties.
Mbogo v Shah (1968) EA 94
• Court shall order particulars of notice
Express provision is made in the Civil Procedure
Rules, 2010 for a court to order that particulars
of any notice pleaded to be supplied to the
opposite party
• Where the plaint is at variance with the
demand letter, particulars in explanation
must be given by the plaintiff
Abdulla v Esmail (1969) EA 111
Jared Benson Kangwana v Attorney-
General (unreported) HC Misc. Civil
Application No. 446 of 1995
When demand letter would not be
advisable
• Anton Pillar Order
• Mareva Injunction
• Initial application for this is usually made
ex parte without notice to the defendant
• Knowledge by defendant that the
application is pending may defeat the very
object which the plaintiff is trying to
achieve, through dissipation of the subject
matter of the suit, or removal of assets of
the debtor from the courts jurisdiction,
etc.
• A demand letter would obviously adversely
affect the element of surprise and thus the
efficacy of the court orders.