Demand Letter for Payment (California)

CALIFORNIA DEMAND LETTER FOR PAYMENT

Pre-Send California Practice Checklist

☐ If this concerns a consumer debt, identify whether the sender is the original creditor, a debt collector, or a debt buyer and review the rules that apply to that role before sending. Cal. Civ. Code § 1788.52 concerns debt buyers' written collection attempts; it is not a venue rule.

☐ Include Section 6 only when the sender is a third-party debt collector subject to the federal FDCPA and this is its first written notice initially addressed to the debtor at a California address. Cal. Civ. Code § 1812.700 may also require a notice in another language after an initial oral contact in that language. Remove Section 6 when inapplicable.

☐ Identify the claim and calculate its accrual, exceptions, and filing deadline. Cal. Code Civ. Proc. § 337(a) generally gives four years for a written contract; § 339(1) gives two years for a nonwritten contract, subject to its exceptions. Section 337(b)(1) gives four years for an eligible book account, while § 337a defines that account and excludes consumer debt as defined there. Section 338(d) gives three years for fraud or mistake, with its discovery rule. For a negotiable note, check the due-date, demand, and exception rules in Cal. Com. Code § 3118.

☐ If considering small claims, check the plaintiff and claim: the general money-demand limit is $6,250 under Cal. Code Civ. Proc. § 116.220(a)(1); a natural person may seek up to $12,500 under § 116.221, subject to statutory exceptions and § 116.231(a)'s limit of no more than two actions demanding over $2,500 in a calendar year. The claim form asks whether payment was demanded where possible under § 116.320(b)(3).

☐ Confirm whether the contract contains an attorney-fee clause for enforcing it. Cal. Civ. Code § 1717(a) makes a qualifying fee clause reciprocal in an action on the contract, subject to its prevailing-party rules.

☐ Verify any interest amount, rate, and start date before sending. Cal. Civ. Code § 3287(a) requires vested, certain or calculable damages and has exceptions. Section 3289(b)'s 10% rate applies after breach only to a post-January 1, 1986 contract without a stipulated legal rate and excludes a note secured by a deed of trust on real property.

☐ For construction matters, check whether a 20-day preliminary notice or mechanic's lien / stop notice procedure under Cal. Civ. Code § 8100 et seq. applies instead.

[LAW FIRM OR CREDITOR LETTERHEAD]

VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED
AND VIA EMAIL TO: [____________________]

Date: [__/__/____]

[DEBTOR LEGAL NAME]
[DEBTOR ADDRESS]
[CITY, STATE, ZIP]

Re: Demand for Payment of Past-Due Amount; [BRIEF INVOICE OR CONTRACT REFERENCE]; California Pre-Litigation Notice

Dear [DEBTOR NAME]:

This firm represents [CREDITOR NAME] ("Creditor") in connection with amounts owed by you (the "Debtor") under [DESCRIBE UNDERLYING OBLIGATION, e.g., the Master Services Agreement dated __/__/____] (the "Agreement"). This letter requests payment of the itemized amount below.

1. Amount Owed

As of [__/__/____], the outstanding balance due from you to Creditor is $[____________________] (the "Outstanding Amount"), itemized as follows:

Interest, if applicable. Creditor claims interest of $[AMOUNT] calculated from [DATE] at [RATE AND BASIS] on [IDENTIFIED PRINCIPAL]. Daily accrual, if applicable: $[AMOUNT].

Total Amount Now Demanded: $[____________________]

2. Basis of Obligation

Debtor's obligation to pay arises from:

☐ A written contract dated [__/__/____].
☐ An oral agreement made on [__/__/____].
☐ A qualifying book account, supported by the attached account records.
☐ An account stated on [__/__/____].
☐ A promissory note dated [__/__/____], with payment due on [__/__/____].
☐ Other: [________________________________________________________]

A true and correct copy of the underlying [agreement / invoices / account statement] is attached as Exhibit A.

3. Demand

Creditor hereby demands that you remit the Total Amount Demanded within [THIRTY (30)] calendar days of your receipt of this letter, on or before [__/__/____], by one of the following means:

1. Wire transfer to: [BANK NAME], ABA [____________], Account [____________];
2. Cashier's check payable to "[CREDITOR NAME]" and delivered to [ADDRESS]; or
3. ACH credit to [________________________________________].

Conditional tender. If you send a check or draft marked "payment in full," Creditor will review its terms before depositing it. Cal. Civ. Code § 1526 addresses the effect of accepting a conditional check or draft on a disputed or unliquidated claim and has exceptions. Creditor does not agree in this letter to accept a lesser amount as full payment.

4. Consequences of Non-Payment

If payment is not received by [__/__/____], Creditor may pursue a civil action based on [IDENTIFY THE CONTRACT OR OTHER BASIS OF THE CLAIM] in a court with jurisdiction. Creditor may seek the unpaid principal, the interest itemized above if recoverable, court costs, and attorney fees if the Agreement or applicable law permits them. Cal. Civ. Code § 1717 may apply to a qualifying fee clause in an action on the contract.

If the claim qualifies, Creditor may instead file in small claims court. The general money-demand limit is $6,250 under Cal. Code Civ. Proc. § 116.220(a)(1), while § 116.221 allows a natural-person plaintiff to demand up to $12,500, subject to its exceptions. Section 116.231(a) separately limits a person to no more than two small claims actions demanding over $2,500 in a calendar year.

5. Dispute Rights

If you dispute all or any portion of the Outstanding Amount, please send a written explanation and any supporting documents to [RESPONSE ADDRESS]. Please respond by [__/__/____] so Creditor can review your position before deciding on further action.

6. Debt-Collector Notice (When Applicable)

The following notice is provided by [THIRD-PARTY DEBT COLLECTOR NAME] in connection with the consumer debt described above:

"The state Rosenthal Fair Debt Collection Practices Act and the federal Fair Debt Collection Practices Act require that, except under unusual circumstances, collectors may not contact you before 8 a.m. or after 9 p.m. They may not harass you by using threats of violence or arrest or by using obscene language. Collectors may not use false or misleading statements or call you at work if they know or have reason to know that you may not receive personal calls at work. For the most part, collectors may not tell another person, other than your attorney or spouse, about your debt. Collectors may contact another person to confirm your location or enforce a judgment. For more information about debt collection activities, you may contact the Federal Trade Commission at 1-877-FTC-HELP or www.ftc.gov."

This notice is included pursuant to Cal. Civ. Code § 1812.700. This communication is from a debt collector and is an attempt to collect a debt; any information obtained will be used for that purpose.

7. Reservation of Rights

This letter is not a waiver, limitation, or election of any right, remedy, or defense. All of Creditor's rights and remedies at law and in equity are expressly reserved. Nothing herein shall toll or extend any limitations period except to the extent required by law.

8. Settlement Communications

Creditor is willing to consider a structured payment resolution. Please direct any response to the undersigned at [____________________] by [__/__/____]. Any agreed change to the amount, timing, or method of payment should be recorded in a signed writing.

Govern yourself accordingly.

Very truly yours,

[ATTORNEY NAME], Esq.
CA Bar No. [____________________]
[LAW FIRM NAME]

Encl.: Exhibit A — [Agreement / Invoices / Account Statement]
cc: [CREDITOR CLIENT CONTACT]

Sources and References

• Cal. Code Civ. Proc. §§ 116.220, 116.221, 116.231, 116.320, 337, 337a, 338, 339
• Cal. Civ. Code §§ 1526, 1717, 1788 et seq. (Rosenthal FDCPA), 1812.700, 3287, 3289
• Cal. Com. Code § 3118
• 15 U.S.C. § 1692 et seq. (federal FDCPA) for consumer debts