Tom Cedoz

Framework · Commercial Litigation

Demand Letter Triage: The First Week

A serious demand letter needs prompt review of deadlines, preservation duties, insurance notice, and contract terms. Use this eight-step sequence to choose and prepare your response in the first week.

Updated September 2026· 8 steps· Prints to 2 pages

  1. Read it twice and calendar everything that resembles a date.

    First read for temperature, second read with a pen. Response deadlines, cure windows, “we will file on” threats, tolling proposals. Some are bluster; contractual cure periods are not — missing one can convert a defensible position into a default. Calendar them all and sort later.

  2. Treat preservation as triggered.

    A credible demand letter generally means litigation is reasonably foreseeable, and the duty to preserve attaches at foreseeability — not at filing. Issue the hold the same week: the people on the deal, their email and messages, the contract file, and any auto-delete that would eat them. The hold checklist is here.

  3. Notify insurers now, not after you “see how it goes.”

    Review every potentially responsive policy — CGL, D&O, E&O, EPL, cyber — and let the broker make the notice call with you, but send written notice to each insurer at the address its policy specifies and get a claim number back. Late notice is among the most litigated coverage defenses, and waiting costs you nothing but options. While you’re there: check whether anyone owes you indemnity or owes you defense under a vendor or customer contract.

  4. Read the contract the way their lawyer already has.

    Notice and cure provisions (did they comply?), dispute escalation clauses — executive conference, then mediation, then arbitration — forum selection and choice of law, fee-shifting, damage caps and consequential-damages waivers, and any contractually shortened limitations period. These clauses decide more commercial disputes than the merits do, and they cut both directions.

  5. Map the relationship and the money.

    Is this counterparty ongoing business or a closed file? What do they owe you — open invoices, warranty obligations, future orders — and what setoff or leverage exists? A demand from a partner you need next quarter is a different problem from the same demand sent by a stranger, and the response posture should reflect it.

  6. Gather facts under privilege, quietly.

    Route the internal “what happened” exercise through counsel from the start. No reply-all archaeology, no email threads titled “the real story.” Identify the five documents that matter and the three people who actually know — then talk to them before their memories are shaped by hallway consensus. And check the demand’s own version against the documents; demand letters reliably overstate their best facts.

  7. Choose a response posture on purpose.

    There are roughly five, each right for some situations: silence (rarely, when any response feeds a campaign); a holding letter (acknowledging, reserving rights, buying analysis time); a substantive response (when the facts strongly favor you and a record helps); a counter-demand (when they owe you more than they’re demanding); or the businessperson phone call — often the best, where principals talk before lawyers entrench, but scripted and debriefed by counsel because it’s still evidence. The point is to pick one, not to land on one.

  8. Write whatever you send as a future exhibit.

    Factual, dated, accurate about the contract, concrete in what it asks for, and explicit in reserving rights. No adjectives you’d wince at on a screen in front of a jury, no admissions wrapped in courtesy, no threats you haven’t decided to keep.

Write a clear record of the response

Write internal records with care from the day the demand arrives. Record the facts, distinguish them from assumptions, and keep explanations consistent. A judge may later read those records.