WHY YOU SHOULD RESPOND TO A DEMAND LETTER OR A BUSINESS LETTER IN NIGERIA

Introduction 

This edition of Legal Illumination of Akintunde Esan (The Legal Adviser Online) is focused on the legal implications of neglecting to respond to a Demand Letter or a Business Letter.

I have seen from my years of practice experience as a Litigation Lawyer, how cases have been won and lost and how opportunities for amicable settlements have been wasted on the footing of neglecting to respond or not responding with the requisite legal intelligence to a Demand Letter or a Business Letter.

What is a Business Letter?

A Business Letter for the purpose of this Legal Illumination is simply the letters dealing with the business relationships between one company or person or parties to another. The contents of Business Letters usually involve issues surrounding the provision of services or supplies to customers or clients.

What is a Demand Letter ? 

A Demand Letter could be a Business Letter or any Letter whatsoever demanding for the performance or nonperformance of an outstanding legal obligation and stating its legal ground for making the demand. The legal strategic significance of a Demand Letter is that, a Demand Letter is a prerequisite for filing a lawsuit under some statutes and rules of Court.

Legal Implications

The applicable principle of law to a Business or Demand Letter is that silence in circumstances in which a reply is obviously expected raises irrebutable presumption of admission by conduct or representation. Thus, where a person or company fails to respond to a Business Letter which by its nature requires a response, it will amount to an admission if the person or company does not respond.[1] 

Some Business Letters constitute a contract agreement even though no formal contract agreement was signed by the parties in as long as the basic elements of a contract are present in the Business Letters exchanged between the parties.

In many cases, the silence of the defendants on the letter of the plaintiff's lawyer led to presumption of admission of its contents by conduct by the defendant.[2] In the case of Maradun v. Tambuwal[3] it was held that:

"The failure of the defendant to react to the contents of the letter written to him by the plaintiff's lawyer even in his affidavit to disclose intention to defend action on merits coupled with the various documents signed by him and exhibited to the plaintiff's affidavit totally obviated the need for the lower Court to transfer the suit to the general cause list. The silence of the defendant on the letter of the plaintiff's lawyer leads to presumption of admission of its contents by conduct by the defendant.” 

Failure to reply to letters demanding payment for work done: In Gwani v. Ebule[4]  the Court held that the failure of the Defendant to reply to letters written by the Claimant both personally and through his solicitor demanding payment for the labour he supplied the Defendant constituted an admission of liability by the Defendant and lent credence to the Claimant's side of the case.

Failure of a debtor to react to a demand letter from a creditor: In In-Time Connection Ltd v Mr Janet Ichie[5], it was held that "where a creditor writes a demand letter which the supposed debtor fails to react to, the silence of the latter leads to presumption of admission of conduct."[6]

  

Failure to react to the figure quoted in a demand letter: In the Registered Trustees Anacowa Motorcycle Owners & Riders Association & Ors v. Nut Endwell Micro Finance Bank Limited [7] held that the failure to react to the figure quoted in the demand letter leads to a presumption of admission by conduct. The Appellants must thus be deemed to have admitted their indebtedness to the Respondent.

 

Conclusion

The fact that a Demand Letter is a prerequisite for filing a lawsuit under some statutes and rules of Court makes the receipt or the writing of a Demand Letter an opportunity to explore a pre-litigation amicable settlement, if properly managed.  Most times non legal minds may find it difficult to grasp the masked legal implication of the wordings of a Demand Letter phrased by a sound legal mind which most times is a pre-litigation contraption for a successful litigation. 

I advise that you let your Lawyer scan your Business Letters before sending them out and as well as scan the ones sent to you. Particularly, any Business Letter or Demand Letter or any letter whatsoever written by a Lawyer to you or your company should be taken seriously and shown to another Lawyer as soon as possible in order to avoid the avoidable pre-litigation legal booby traps usually set up with such letters in anticipation and preparation for litigation. 

If you need legal illumination on arising legal issues in a Business Letter sent or received by you or your need legal illumination or legal interpretation or legal advice on a Demand Letter sent to you by a Lawyer or you need to write a Demand Letter to demand for compensation for a legal wrong or to demand for the performance or nonperformance of a legal obligation, you may contact Akintunde Esan (the Legal Adviser Online) for further illumination.

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1.See: Per Haruna Simon Tsammani ,JCA (Pp. 53-54, paras. F-B) Ogundimu & Ors v. Akinyemi (2020) LPELR-49681(CA)Enterprise Bank Ltd v. Meens Nigeria Limited

(2014) LPELR - 23503 (CA); Trade Bank Plc v. Chami (2003) 13 NWLR (pt.336) 158 at 219 - 220 and Vaswani v. Johnson (2000) 11 NWLR (pt.679) 582. See also Zenon Pet & Gas v. Idrisiyya Ltd (2006) 8 NWLR (pt.982) 221.

2. See Joe Iga v. Chief Amakiri [1976] 11 SC 1. Gwani v. Ebule 3.[1990] 5 NWLR (Pt.149) 201

4. (2015) LPELR-24443(CA) Per Awotoye ,J.C.A (Pp. 31 paras. A) [1990] 5 NWLR (PT.149) 201

5.  (2008) LPELR - 8772 (CA), per Eko JCA (as he then was) at P.20 Para D-G

6.Per Adefope-Okojie ,J.C.A (Pp. 19-20 Paras. C)Construction Road To House Limited & Anor V. Unity Bank Plc (2017) LPELR-43187(CA)

7.Per Wambai ,J.C.A (Pp. 22-23 paras. E-E) (2018) LPELR-46749(CA)