No Related Post Found.
Clients typically consult their lawyers when their counterparties breach the contractual agreements signed by the parties. In such instances, the aggrieved parties are usually most concerned with the next steps available to them, in order to obtain the legal remedies which they believe they are entitled to.
When instructed, the first step which a lawyer would typically embark on is to review the content of the contractual agreement in order to determine whether there is indeed a breach of contract and if so, the remedies which may be available to the aggrieved party.
Upon determining that there is a legal cause of action, the lawyer may advise their client that a letter of demand (LOD) should be issued to the breaching party. An LOD issued on the letterhead of a law firm generally carries greater weight than one which is issued by the aggrieved party, as it could be perceived by the breaching party that there is a strong intention to resort to formal legal proceedings if the demand made within the LOD is not complied with.
In this article, the legal purpose of using a LOD and its substance will be explored, in the hope that our readers will be able to better appreciate the legal landscape and to resolve their contractual disputes with confidence.
If there are any suggestions and/or legal queries, please feel free to contact the author, Waltson Tan, at: waltson@tjylaw.com.sg
An LOD is a formal letter issued by an aggrieved party to a breaching party to either: (a) assert a claim for breach of contract and make demands which require the breaching party to comply with; or (b) seek certain agreed specific performance, pursuant to the terms agreed upon in a contractual arrangement.
The issuance of an LOD typically precedes the commencement of formal legal proceedings in the Singapore courts.
An LOD typically includes the following information:
(a) the law firm and the lawyer issuing the LOD;
(b) particulars of the claimant;
(c) particulars of the dispute and the material facts relating to the claim of the alleged breach of contract;
(d) the legal claims which are made by the claimant against the recipient;
(e) the claimant’s demands, such as the sum owed to the claimant; and
(f) the proposed deadline by which the recipient must satisfy the demands, failing which legal action may be taken.
As alluded to in the introduction section, an LOD should ideally be sent by a law firm. In this regard, clients should not generally have to be concerned with the drafting of the LOD once they instruct the legal professionals to do so.
Nonetheless, if a client wishes to gauge the quality of an LOD drafted by their legal counsel, he or she can assess by considering: (a) the clarity and the precision of language of the LOD in capturing the essence of the breach of contract and the remedies sought; and (b) the manner in which the breaches and attendant demands of the aggrieved party are set out in the LOD.
The framework of a typical LOD is as follows:
(i) first, the contractual obligations which are breached are to be stipulated; and
(ii) second, the desired remedy for the particular breaches should be specified.
Every part of the LOD must be meticulously drafted to withstand scrutiny and align with legal authority, as an LOD serves as the roadmap and sets the trajectory of the dispute resolution process.
Clients are often tempted to instruct their legal counsel to draft LODs which reflect their anger, threat and aggression, especially since they are hoping that their demands are being met by the recipient. In our experience, however, approaching the matter with all guns blazing is generally not recommended. Our recommended approach is that the LOD should be drafted in a manner that balances the threat of legal action and at the same time, offer the recipient an opportunity to come to a conciliatory resolution.
Clients also commonly request their legal counsel to include all kinds of demands and remedies, whether legally justified or not. This is, however, not our recommended way to approach the drafting of an LOD for a number of reasons. First, if the demands and remedies sought are not legally justified, it is likely to be ignored and this will backfire on the claimant. Second, demands and remedies which do not have strong legal bases are unlikely to withstand the scrutiny of a judge if the parties eventually go to court.
Once the LOD is delivered, clients should anticipate and prepare for various responses from the receiving party, such as suggestions for conciliatory negotiations or outright denial of liability. Depending on the response, the next step could be to draft a settlement agreement or to move ahead with the filing of an originating claim against the recipient in the Singapore courts.
Regardless of the response from the recipient, there would be strategic considerations in determining the next steps, and lawyers are well-placed to guide clients in this aspect.
The value-add of a good lawyer is their ability to utilise their experience and strategic thinking to guide clients through the range of legal options. In the pursuit of securing a resolution, the ultimate objective of a lawyer is to safeguard the legal and business interests of the client.
When it comes to contractual disputes, the impact of a well-drafted LOD cannot be overstated.
It is our hope that readers of this article are now better informed of the purpose and effect of sending an LOD in Singapore, and be empowered to assert their contractual rights with clarity and conviction.
*****
Our firm specialises in representing clients on the legal aspects of commercial matters, including advising clients on resolving their commercial disputes.
The author, Waltson Tan, is a corporate lawyer trained in London and Singapore. He is qualified as an advocate and solicitor in Singapore, and has more than seven years of post-qualification experience.
Waltson focuses his practice on mergers and acquisitions, private equity, joint ventures, investment funds and other general corporate and commercial transactions. He has also represented numerous leading multinational organisations on a broad spectrum of corporate, regulatory, cross-border restructuring and employment matters.
Waltson also advises clients on a monthly and yearly retainer basis, where he provides dedicated services to each client in relation to the issues which clients face, including general corporate and employment related matters.
If you require further information and/or expert guidance on the above or any other area of law, you may wish to contact the author of the article, whose details are as follows:
Waltson Tan Director +65 8079 0028 waltson@tjylaw.com.sg |
Office address: 101A Upper Cross Street #13-11, People’s Park Centre Singapore 058358 |
6 February 2024
Clients typically consult their lawyers when their counterparties breach the contractual agreements signed by the parties. In such instances, the aggrieved parties are usually most concerned with the next steps available to them, in order to obtain the legal remedies which they believe they are entitled to.
When instructed, the first step which a lawyer would typically embark on is to review the content of the contractual agreement in order to determine whether there is indeed a breach of contract and if so, the remedies which may be available to the aggrieved party.
Upon determining that there is a legal cause of action, the lawyer may advise their client that a letter of demand (LOD) should be issued to the breaching party. An LOD issued on the letterhead of a law firm generally carries greater weight than one which is issued by the aggrieved party, as it could be perceived by the breaching party that there is a strong intention to resort to formal legal proceedings if the demand made within the LOD is not complied with.
In this article, the legal purpose of using a LOD and its substance will be explored, in the hope that our readers will be able to better appreciate the legal landscape and to resolve their contractual disputes with confidence.
If there are any suggestions and/or legal queries, please feel free to contact the author, Waltson Tan, at: waltson@tjylaw.com.sg
An LOD is a formal letter issued by an aggrieved party to a breaching party to either: (a) assert a claim for breach of contract and make demands which require the breaching party to comply with; or (b) seek certain agreed specific performance, pursuant to the terms agreed upon in a contractual arrangement.
The issuance of an LOD typically precedes the commencement of formal legal proceedings in the Singapore courts.
An LOD typically includes the following information:
(a) the law firm and the lawyer issuing the LOD;
(b) particulars of the claimant;
(c) particulars of the dispute and the material facts relating to the claim of the alleged breach of contract;
(d) the legal claims which are made by the claimant against the recipient;
(e) the claimant’s demands, such as the sum owed to the claimant; and
(f) the proposed deadline by which the recipient must satisfy the demands, failing which legal action may be taken.
As alluded to in the introduction section, an LOD should ideally be sent by a law firm. In this regard, clients should not generally have to be concerned with the drafting of the LOD once they instruct the legal professionals to do so.
Nonetheless, if a client wishes to gauge the quality of an LOD drafted by their legal counsel, he or she can assess by considering: (a) the clarity and the precision of language of the LOD in capturing the essence of the breach of contract and the remedies sought; and (b) the manner in which the breaches and attendant demands of the aggrieved party are set out in the LOD.
The framework of a typical LOD is as follows:
(i) first, the contractual obligations which are breached are to be stipulated; and
(ii) second, the desired remedy for the particular breaches should be specified.
Every part of the LOD must be meticulously drafted to withstand scrutiny and align with legal authority, as an LOD serves as the roadmap and sets the trajectory of the dispute resolution process.
Clients are often tempted to instruct their legal counsel to draft LODs which reflect their anger, threat and aggression, especially since they are hoping that their demands are being met by the recipient. In our experience, however, approaching the matter with all guns blazing is generally not recommended. Our recommended approach is that the LOD should be drafted in a manner that balances the threat of legal action and at the same time, offer the recipient an opportunity to come to a conciliatory resolution.
Clients also commonly request their legal counsel to include all kinds of demands and remedies, whether legally justified or not. This is, however, not our recommended way to approach the drafting of an LOD for a number of reasons. First, if the demands and remedies sought are not legally justified, it is likely to be ignored and this will backfire on the claimant. Second, demands and remedies which do not have strong legal bases are unlikely to withstand the scrutiny of a judge if the parties eventually go to court.
Once the LOD is delivered, clients should anticipate and prepare for various responses from the receiving party, such as suggestions for conciliatory negotiations or outright denial of liability. Depending on the response, the next step could be to draft a settlement agreement or to move ahead with the filing of an originating claim against the recipient in the Singapore courts.
Regardless of the response from the recipient, there would be strategic considerations in determining the next steps, and lawyers are well-placed to guide clients in this aspect.
The value-add of a good lawyer is their ability to utilise their experience and strategic thinking to guide clients through the range of legal options. In the pursuit of securing a resolution, the ultimate objective of a lawyer is to safeguard the legal and business interests of the client.
When it comes to contractual disputes, the impact of a well-drafted LOD cannot be overstated.
It is our hope that readers of this article are now better informed of the purpose and effect of sending an LOD in Singapore, and be empowered to assert their contractual rights with clarity and conviction.
*****
Our firm specialises in representing clients on the legal aspects of commercial matters, including advising clients on resolving their commercial disputes.
The author, Waltson Tan, is a corporate lawyer trained in London and Singapore. He is qualified as an advocate and solicitor in Singapore, and has more than seven years of post-qualification experience.
Waltson focuses his practice on mergers and acquisitions, private equity, joint ventures, investment funds and other general corporate and commercial transactions. He has also represented numerous leading multinational organisations on a broad spectrum of corporate, regulatory, cross-border restructuring and employment matters.
Waltson also advises clients on a monthly and yearly retainer basis, where he provides dedicated services to each client in relation to the issues which clients face, including general corporate and employment related matters.
If you require further information and/or expert guidance on the above or any other area of law, you may wish to contact the author of the article, whose details are as follows:
No Related Post Found.