DEMAND LETTER - BREACH OF CONTRACT
State of Alabama
[LAW FIRM NAME]
Attorneys at Law
[FIRM ADDRESS LINE 1]
[FIRM ADDRESS LINE 2]
[CITY], Alabama [ZIP]
Tel: [TELEPHONE]
Fax: [FAX]
Email: [EMAIL]
Alabama State Bar No. [BAR NUMBER]
SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND FIRST-CLASS U.S. MAIL
[DATE]
[RECIPIENT NAME]
[RECIPIENT TITLE]
[COMPANY NAME]
[ADDRESS LINE 1]
[ADDRESS LINE 2]
[CITY, STATE ZIP]
Re: Formal Demand for Cure of Material Breach of Contract
Contract Date: [CONTRACT DATE]
Contract Title: [CONTRACT TITLE/DESCRIPTION]
Our Client: [CLIENT NAME]
Demand Amount: $[TOTAL DEMAND AMOUNT]
Dear [RECIPIENT NAME]:
This firm represents [CLIENT NAME] ("our Client") in connection with the above-referenced agreement (the "Contract") between our Client and [BREACHING PARTY NAME] ("you" or "[SHORT NAME]"). We write to formally notify you of your material breach of the Contract and to demand immediate cure and full compensation for damages sustained.
THIS IS A FORMAL DEMAND UNDER ALABAMA LAW. FAILURE TO RESPOND MAY RESULT IN IMMEDIATE LITIGATION IN ALABAMA STATE OR FEDERAL COURT WITHOUT FURTHER NOTICE.
I. BACKGROUND AND CONTRACTUAL RELATIONSHIP
On or about [CONTRACT DATE], our Client and [BREACHING PARTY NAME] entered into the Contract, a true and correct copy of which is attached hereto as Exhibit A. Under the terms of that agreement:
-
Nature of Agreement: [DESCRIBE THE TYPE OF CONTRACT - e.g., supply agreement, service contract, construction contract, consulting agreement]
-
Client's Obligations: Our Client agreed to [DESCRIBE CLIENT'S MATERIAL OBLIGATIONS UNDER THE CONTRACT].
-
Your Obligations: In exchange, you agreed to [DESCRIBE BREACHING PARTY'S MATERIAL OBLIGATIONS].
-
Contract Price/Consideration: [DESCRIBE PAYMENT TERMS AND AMOUNTS]
Our Client has fully performed all of its obligations under the Contract, or was ready, willing, and able to perform at all relevant times. Under Alabama law, our Client's performance is a condition precedent to recovery for your breach. See Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875 So. 2d 1143 (Ala. 2003).
II. YOUR MATERIAL BREACH OF CONTRACT
You have materially breached the Contract in the following particulars:
A. Specific Breaches
☐ Breach #1: [TITLE OF BREACH]
- Contractual Provision Violated: Section [X] of the Contract provides: "[QUOTE RELEVANT CONTRACT LANGUAGE]"
- Your Conduct: On or about [DATE], you [DESCRIBE SPECIFIC CONDUCT CONSTITUTING BREACH].
- Materiality: This breach is material because [EXPLAIN WHY THE BREACH GOES TO THE ESSENCE OF THE CONTRACT].
☐ Breach #2: [TITLE OF BREACH]
- Contractual Provision Violated: Section [X] of the Contract provides: "[QUOTE RELEVANT CONTRACT LANGUAGE]"
- Your Conduct: [DESCRIBE SPECIFIC CONDUCT].
- Materiality: [EXPLAIN MATERIALITY].
☐ Breach #3: [TITLE OF BREACH]
- [CONTINUE AS NEEDED]
B. Prior Notice and Failure to Cure
☐ On [DATE], our Client provided you with written notice of your breach and demanded cure within [X] days as required by Section [X] of the Contract. You failed to cure within the contractual cure period.
☐ The Contract does not provide for a cure period, and none is required under Alabama law for material breaches of this nature.
III. LEGAL BASIS FOR CLAIMS UNDER ALABAMA LAW
A. Breach of Contract
Under Alabama law, to establish a breach of contract claim, a plaintiff must prove:
- The existence of a valid contract binding the parties;
- The plaintiff's performance under the contract;
- The defendant's nonperformance; and
- Resulting damages.
See Reynolds Metals Co. v. Hill, 825 So. 2d 100, 105 (Ala. 2002); State Farm Fire & Cas. Co. v. Slade, 747 So. 2d 293, 303 (Ala. 1999).
Each element is satisfied here. The Contract is valid and enforceable, our Client has performed, you have materially breached as detailed above, and our Client has suffered substantial damages.
B. Material Breach Standard
Under Alabama law, a breach is material when it "goes to the essence of the contract" and defeats the purpose for which the contract was made. See Slade, 747 So. 2d at 303. A material breach excuses further performance by the non-breaching party and entitles it to recover damages.
C. Implied Covenant of Good Faith
Alabama law recognizes an implied covenant of good faith in certain contractual relationships, particularly insurance contracts and employment contracts. See Harco Drugs, Inc. v. Holloway, 669 So. 2d 878 (Ala. 1995).
IV. DAMAGES UNDER ALABAMA LAW
A. Compensatory Damages
Under Alabama law, contract damages are designed to put the non-breaching party in the position it would have been in had the contract been performed. See BE & K Constr. Co. v. United Bhd. of Carpenters, 90 So. 3d 73 (Ala. 2012).
| Category | Description | Amount |
|---|---|---|
| Direct Damages | [DESCRIBE - e.g., cost of substitute performance, lost profits, amounts paid without consideration] | $[AMOUNT] |
| Consequential Damages | [DESCRIBE - e.g., lost business opportunities, third-party liabilities] | $[AMOUNT] |
| Incidental Damages | [DESCRIBE - e.g., costs of finding replacement, storage costs] | $[AMOUNT] |
| SUBTOTAL | $[SUBTOTAL] |
B. Prejudgment Interest
Under Alabama Code section 8-8-1, our Client is entitled to prejudgment interest at the rate of 6% per annum on the amount owed:
"Except as otherwise provided by law, the rate of interest upon the loan or forbearance of money, goods or things in action shall be six dollars upon one hundred dollars for one year..."
See Alfa Life Ins. Corp. v. Jackson, 906 So. 2d 143 (Ala. 2005).
| Principal | Rate | From Date | To Date | Interest |
|---|---|---|---|---|
| $[AMOUNT] | 6% | [DATE OF BREACH] | [CURRENT DATE] | $[AMOUNT] |
C. Attorney Fees
☐ If Contract Provides: Section [X] of the Contract provides for recovery of attorney fees and costs. Pursuant to that provision, our Client is entitled to recover all reasonable attorney fees incurred in enforcing the Contract.
☐ Note on Alabama Rule: Alabama follows the American Rule, under which attorney fees are generally not recoverable unless authorized by contract or statute. See Mountain View Coach Lines, Inc. v. Storms, 476 So. 2d 1099 (Ala. 1985).
D. Punitive Damages
If your breach was accompanied by fraud, willful misconduct, or gross negligence, our Client may be entitled to punitive damages under Alabama law. However, Alabama Code section 6-11-21 caps punitive damages as follows:
- Three times compensatory damages or $500,000, whichever is greater (no physical injury);
- Three times compensatory damages or $1,500,000, whichever is greater (physical injury involved).
E. Total Damages Summary
| Category | Amount |
|---|---|
| Direct/Compensatory Damages | $[AMOUNT] |
| Consequential Damages | $[AMOUNT] |
| Incidental Damages | $[AMOUNT] |
| Prejudgment Interest (6%) | $[AMOUNT] |
| Attorney Fees (if contractual) | $[AMOUNT] |
| TOTAL DEMAND | $[TOTAL] |
V. DEMAND
Based on the foregoing, our Client hereby demands that you:
A. Cure of Breach (If Cure Remains Possible)
☐ Within [X] calendar days of your receipt of this letter, take the following actions:
1. [SPECIFIC CURE ACTION #1]
2. [SPECIFIC CURE ACTION #2]
3. [SPECIFIC CURE ACTION #3]
B. Monetary Compensation
☐ Within [X] calendar days of your receipt of this letter, pay to our Client the total sum of $[TOTAL DEMAND AMOUNT] by certified check or wire transfer payable to [PAYEE NAME].
VI. STATUTE OF LIMITATIONS NOTICE
Under Alabama Code section 6-2-34, actions on contracts (both written and oral) must be brought within six (6) years from the date of breach. Our Client's claims are timely and will be vigorously prosecuted if not resolved.
VII. CONSEQUENCES OF NON-COMPLIANCE
If you fail to cure your breach and/or pay the amounts demanded within the time specified, our Client is prepared to file suit without further notice in [CIRCUIT COURT OF [COUNTY] COUNTY, ALABAMA / UNITED STATES DISTRICT COURT FOR THE [NORTHERN/MIDDLE/SOUTHERN] DISTRICT OF ALABAMA]. In such litigation, our Client will seek:
- All compensatory, consequential, and incidental damages;
- Prejudgment interest at 6% per annum pursuant to Alabama Code section 8-8-1;
- Post-judgment interest at the legal rate;
- Attorney fees and costs (if contractually authorized);
- Punitive damages if warranted by the evidence;
- Any other relief the court deems just and proper.
VIII. DOCUMENT PRESERVATION DEMAND
You are hereby placed on notice of our Client's claims and potential litigation. You are legally obligated to preserve all documents, electronically stored information (ESI), and tangible evidence relating to the Contract and the matters described herein. Alabama courts have the authority to impose sanctions for spoliation of evidence. See Smith v. Atkinson, 771 So. 2d 429 (Ala. 2000).
IX. RESERVATION OF RIGHTS
Our Client expressly reserves all rights, claims, and remedies available at law or in equity. This letter does not constitute a waiver or limitation of any rights.
X. RESPONSE REQUIRED
You must respond to this demand in writing within [X] calendar days of your receipt of this letter. Direct your response to the undersigned at the address above.
We are prepared to discuss resolution of this matter, but absent a satisfactory response, litigation will follow.
Govern yourself accordingly.
Very truly yours,
[LAW FIRM NAME]
By: _______________________________
[ATTORNEY NAME]
Alabama State Bar No. [BAR NUMBER]
[EMAIL]
[DIRECT TELEPHONE]
Enclosures:
☐ Exhibit A - Contract
☐ Exhibit B - Prior Correspondence
☐ Exhibit C - Damage Calculations
cc: [CLIENT NAME] (via email)