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What should I do if I’ve received a letter of demand from a lawyer?

Intro:

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In this modern era when legal services are getting more and more accessible, it is very common for one to receive a ‘Letter of demand’ whenever there is a dispute arises.

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Hence, today we going to share about 3 frequently asked questions about receiving a letter of demand in our article:

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  • Whether receiving a notice of demand means that the matter has been brought before the Court and the receiver has been sued?
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  • What the receiver should pay attention to after receiving a letter of demand?

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  • What are the legal consequences of ignoring a letter of demand?

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Question 1: Whether receiving a notice of demand means that the receiver has been sued?

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This is actually one of the common misconceptions. A letter of demand itself is not a court document but in essence, a letter demanding a potential litigant to do or not to do a thing within a specified period of time so as to avoid litigation in the future.

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For example, a letter demanding a debtor to make payment within 7 days after receiving the letter of demand (debt-related matters); or a letter demanding the maker to delete his defamatory post published on Facebook immediately (for defamation action).

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In some cases, the purpose of a lawyer’s letter is not really to ask another party to do a certain act. Rather, it is to clarify legal position so that the client of the issuing firm could rely on a particular legal defense when the matter goes to the Court in the future.

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Therefore, when one receives a letter of demand, it does not necessarily mean that he/she has been sued, unless the letter itself also informs the receiving party that a court action has been filed enclosing the supporting court documents.
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Question 2: What the receiver should pay attention to after receiving a letter of demand?

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Basically, other than the terms of demand (against the receiving party), a letter of demand itself will also illustrate how the legal dispute arises (with chronology of events) and the allegations against the receiver.

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Therefore, after receiving the letter of demand, the receiver not only need to pay attention to the deadline in replying the letter, he also needs to pay attention to the contents of all the allegations made against him, and whether these allegations are wrong.

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If the allegations stipulated therein are inconsistent with what have actually happened between the parties or in conflict with the written documents involved, then it is advisable for the receiver to engage a lawyer immediately to formally reply, deny, correct, and/or clarify the receiver’s position through a reply letter.

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In addition, if the receiving party feels that the request made by the issuing party in the letter of demand is unreasonable, it is advisable for the receiving party to engage a lawyer to seek legal advice as to whether such demand adhering to legal principles applicable.

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Question 3: What are the legal consequences of ignoring a letter of demand?

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In many cases, the Defendants have ignored the letters of demands received, without knowing that such behaviors could have adversely affected or compromised their cases in the subsequent lawsuits.

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It should be noted that although ignoring a letter of demand does not mean the receiving party admitting his liability, however, when the matter is being brought to the Court later, the Court would still consider the receiver’s act in ignoring the letter as a relevant fact to determine whether the other party is liable or not (Section 8 of the Evidence Act 1950).

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If the litigant is a businessman, the fact that he has failed to reply to a letter of demand issued could be a very disadvantageous factor because according to the decided cases, a businessman who receives a letter of demand ought to answer it if he means to dispute the facts as alleged in the letter.

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In the case of Small Medium Enterprise Development Bank Malaysia (formerly known as Bank Perusahaan Kecil dan Sederhana Malaysia Bhd) v. Lim Woon Katt, the court has actually allowed the Plaintiff’s Summary Judgment application after considered the fact that the defendant did not reply to the letter of demand issued by the Plaintiff’s solicitors.

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Therefore, after receiving a letter of demand, the best way is to find a lawyer to seek for consultation.

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These are the information regarding letter of demand that we would want to share with you today. If you have any inquiries about litigation matter, please do contact us::https://wa.link/q3kmv5

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****If you want to know about the steps to be taken before initiating debt recovery action, you can read our article.

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****About the frequently asked question for debt recovery action, you can read our article.

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About validity of friendly loan between friends and relatives, you can read our article.

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