Saved answer

Demand letter for unpaid invoices (services agreement)

No single statute governs a business demand letter. The claim is ordinarily breach of contract under state common law. UCC Article 2 "applies to transactions in goods," so a pure services agreement generally falls outside it. For mixed goods-and-services contracts, the tests vary by state. U.C.C. § 2-1021

• Check for fee-shifting presentment rules. Some statutes condition fee recovery on presenting the claim before suit. In Texas, for example, a claim for "rendered services" or on "an oral or written contract" supports reasonable fees Tex. Civ. Prac. & Rem. Code § 38.001(b)2, but only if the claimant is represented by an attorney, presents the claim, and is not paid the just amount owed within 30 days. Tex. Civ. Prac. & Rem. Code § 38.0022
• Keep settlement offers separate. Evidence of offering a compromise, and "conduct or a statement made during compromise negotiations about the claim," is generally inadmissible to prove the claim. Put any discount offer in a separate, labeled section. State evidence rules may differ. Fed. R. Evid. 4083
• Is the FDCPA in play? The Act reaches only consumer "debt," meaning obligations "primarily for personal, family, or household purposes," so a business-to-business services invoice usually falls outside it. A creditor's own employee collecting "in the name of the creditor" is excluded, but a creditor that uses "any name other than his own" is covered. 15 U.S.C. § 1692a(5)–(6)4
• Lawyers can be debt collectors. The Act "applies to attorneys who 'regularly' engage in consumer-debt-collection activity, even when that activity consists of litigation." Heintz v. Jenkins, 514 U.S. 291 (1995)5
• If the FDCPA applies, add validation information. The required notice is due "[w]ithin five days after the initial communication with a consumer." 15 U.S.C. § 1692g(a)6 Regulation F specifies the content, and using Model Form B-1 is a safe harbor. 12 C.F.R. § 1006.347

Skeleton

``` [Letterhead] — [Date] — [Delivery method required by the notice clause] Re: Demand for Payment — [Services Agreement dated __] — Invoice Nos. __

1. The Agreement: parties, date, payment terms (§ __), late fee or interest (§ __), fees clause (§ __)
2. Services performed and invoices issued
3. Table: invoice no. | date | amount | due date | balance
4. Total demanded: $__ (+ contractual interest only if the Agreement provides for it)
5. Deadline and payment method: [date]; [wire/check details]
6. Next steps: suit or arbitration under § __; fees if the contract or statute allows
7. [Separate, labeled] Settlement proposal (FRE 408 / state analog)
8. Reservation of rights; request to preserve documents

[Signature block] ```