Everything You Need to Know About Writing a Demand Letter in Ontario

In this post, we’ll cover:

• What is a demand letter?
• When is such a letter needed?
• What needs to be included in one in Ontario?
• How to write one for payment
• The benefits of using Legalhood for a demand letter
• How to serve a demand letter
• How the receiving party might respond

What is a Demand Letter?

Simply put, a demand letter is a formal way of alerting another party of an unresolved issue for which you’re seeking the appropriate compensation. FYI, a demand letter in Ontario is not a legally-binding document, instead, it’s more “fair warning” of your request to the other party. A demand letter in Ontario or in Canada doesn’t give you any rights but does give you and the other party a chance to resolve an issue out of court. 

Now, you might be wondering, why can’t I just send an email, write an informal letter, or talk to the other party in person? Of course, you can start with those — and some people do. But if your issue isn’t resolved through those types of communication, a strong demand letter for payment or other compensation is a formal way of getting your issue the attention it deserves. 

When do you need a Demand Letter?

You can plan to first serve the letter as a precursor to legal action, then move on to court proceedings if your letter doesn’t resolve your situation. In Ontario, you would proceed to Small Claims Court to dispute financial claims of $35,000 or less. 

Here are two times when a demand letter could help you, as well as what you need to include in one:

You’re Owed Money For Work You’ve Done

If you’re stuck in a situation where money is owed to you, the letter details the exact money owed, for what reason, and your requested payment terms. For example, you are a landscaper with a signed or agreed-upon contract that stipulated what work you would provide and the cost of that labour. You did the work and billed your client but the net owing deadline has passed and you still haven’t been paid. Several notifications later, the other party still owes you.

You’ve Been Wrongfully Terminated or Discriminated Against 

A demand letter can also be used to address an employee/employer situation if, as an employee, you were wrongfully terminated or your rights violated. Perhaps you were fired without the appropriate, contractual amount of notice and not paid the right compensation. Or you lost your job because the employer failed to accommodate a disability that they knew about. 

You’ll need to include a summary of all the relevant events to support your claim and your compensation request. In this type of demand letter, it’s typical to ask for monetary compensation — like equivalent salary pay as reasonable notice for your dismissal. Or, request your employer modify your Record of Employment to reflect you weren’t terminated with cause. You could also ask for a positive reference letter.

How to Write a Demand Letter for Payment or Compensation

How to write a demand letter? One option is using a template. Or you can find examples online to see what you should include and what it should look like. But the issue with using a template or just going off a sample is that you might not have legal oversight to include everything you need. 

Our tips for an outstanding, strong demand letter? Be exact and specific. Make sure you include the amount of outstanding payments owed to you or the compensation you’re seeking. The other items to include in your demand letter are:

• The date 
• The other party’s contact information (email, phone number, address)
• The legal phrase “without prejudice” so that the contents of the demand letter can’t be used against you in court 
• A summary of the agreement or contract and the issue
• Your payment demand 
• A reasonable amount of time for the other party to comply 
• The deadline for when the matter must be settled
• Fair and specific terms for payment or compensation
• Wording that says you intend to start a lawsuit if your letter is ignored
• Your contact information and signature

Be sure not to use threatening language or derogatory remarks. Keep a neutral tone, stating the facts as you see them and making your requests simply and clearly.

The Benefits of Using Legalhood for a Demand Letter in Ontario

At Legalhood, we make the answer to “how to write a demand letter” super easy. Our step-by-step, AI-led process takes the guesswork out of writing an outstanding, strong letter for requesting payment or compensation. You start by filling out our online Smart Form. This easy-to-follow tool prompts you to provide all the information needed for our AI technology to create your letter quickly.

You also get the benefit of legal oversight, either by a legal technician, lawyer, or paralegal, depending on which package you choose and your preference. Legalhood’s network of lawyers is accredited by the Canadian Bar Association — we aren’t a legal firm ourselves but connect everyday people to the legal services they need. 

We have three affordable, Demand Letter Packages to choose from:

Automated Demand Letter – Your demand letter is automatically generated by AI tech from your Smart Form — with the appropriate legal and formal terms added. A legal technician will review your letter to ensure all the info is there.

Demand Letter with Legal Review – The demand letter generated from your Smart Form is reviewed by a lawyer or paralegal and they provide comments on the side if needed. You then have the opportunity to make some changes to your letter before sending it to the other party. You also get access to customer service support.

Demand Letter with Legal Review & A Phone Call From A Lawyer – The same as the above plus a phone consultation from a lawyer or paralegal after they’ve added their comments. During the phone call, you can clarify some of their corrections and get answers to your relevant legal questions.

How to Serve a Demand Letter

Once you have the final version of your demand letter, you’re ready to send it! Can you send the letter via email? Yes, you can. In Ontario, and the rest of Canada, you can email or mail your letter to the other party. We suggest using Canada Post’s trackable service or a courier so you know when the letter is received.

If you’ve used Legalhood’s demand letter services, we’d be happy to send your letter for an additional cost. We use Canada Post’s trackable service so you get a tracking number, receipt, and delivery notification.

How the Receiving Party Might Respond

We get it, waiting for a response can be stressful. You’re not sure how the other party will respond, how soon, or even if they’ll respond at all. Typically, a receiving party will respond in one of four ways:

1. Not respond to your demand letter (basically ignore it)
2. Deny the situation as you’ve presented it in your letter
3. Send a counteroffer
4. Agree to your demands and proceed to compensate you 

Not respond to your letter

Can you ignore a demand letter you’ve received? Unfortunately, the recipient can choose not to engage after receiving your demand letter. If the deadline set in the demand letter has passed and you still haven’t heard from the other party, you can appeal to the courts in Canada or send a final demand letter for payment.

In that follow-up letter, you can say that if this one is also ignored then you will take the matter to court. Sometimes it takes more than one letter for a receiving party to understand the seriousness of the situation and respond. And the other party might finally respond to a final demand letter for payment or compensation to avoid going through costly court proceedings.

Deny the situation as you’ve presented it

This response means that it’s not the payment or compensation that the other party disagrees with, it’s the facts of the event as you’ve described them. Typically, negotiation isn’t needed (or desired by the other party) at this point so it’s best to turn to a lawyer. If your lawyer finds that your version of the events and your requests are well-founded and supported by evidence, you might have a strong case in court.

Send a counteroffer

This is a typical response to a demand letter. Expect to enter into a negotiation — sometimes the other party starts with a very low counteroffer and you might go back and forth a few times. Prepare yourself with what you’re willing to settle on. 

Now, even if you’re prepared for a counteroffer, does the thought of negotiating make you uneasy? If so, Legalhood has a handy tool for making offers and counteroffers through our website that helps take out the awkwardness. If you’ve prepared a demand letter using Legalhood’s technology and legal resources, you can use this communication channel for negotiations. You can avoid direct confrontations between you and the other party.

Agree with your demand letter requests

Winner, winner, chicken dinner! This response means that the other party agrees to pay or compensate you as requested. However, they might ask for different payment terms. Like, if you asked for a lump sum payment, they might instead ask to pay in multiple payments over a period of time to make it more manageable for them.

Getting Your Demand Letter Right With Legalhood

Now that you know how to write a demand letter, get started on the right foot with Legalhood. Set yourself up for success with a strong letter for compensation using our Smart Form and AI technology. Get the legal support you need! We can even serve your demand letter and provide a communication portal to make negotiations less stressful.

Get started on your demand letter today or contact a lawyer to get your questions answered.