Article: If you have an attorney, sit down together and review the contract to see if you are in breach. You will want to know if you did indeed violate the contract or if the other party is fabricating the claim. Be sure to be honest with your attorney about the situation, so that he or she can give you the best legal advice. It is quite possible that you breached the contract on purpose. It may be cheaper to pay the damages for breaching the contract than fulfilling its original terms. If you breached on purpose your primary goal will be to reduce the amount of damages you have to pay under the contract. Although it's possible that you only entered into an "oral contract," those are fairly rare today. Most states have now passed laws which require all contracts to be in writing when the goods or services involved are worth $500 or more. Written contracts are always preferable because they allow you to detail how each party must uphold its duties and how both sides should respond if any disagreements or disputes arise. This includes any discussion of the contract in question or an official "demand letter" from the other party. A demand letter sent from the other party's lawyer is simply a letter that outlines what they think your contractual obligation is. For instance, it could demand that you pay a specific amount for services already rendered. Once you get a demand letter, the ball is in your court. It's then up to you and your attorney to decide how to respond to it. Make sure that the demand letter, if you have received one, complies with state law. Many states require that a pre-lawsuit letter is sent, in order to increase the chance of out-of-court settlement. Although most demand letters sent out are legitimate, it's always important to carefully review the signature and the contents. Never just assume you're in business with someone if the name isn't readily familiar. There are scam artists who do send out such mail, in the hopes that you will accidentally provide critical personal or business information that can be used for identity theft purposes. If you don't know the individual or company contacting you, there's obviously no need to respond. If you're certain that the letter is legitimate, only provide the least amount of necessary information, in keeping with your lawyer's advice.
What is a summary of what this article is about?
Review the contract. Review all correspondence from the other party. Decide whether the claim is part of a scam.