Legal Disclaimer: This article provides general information for educational purposes only and does not constitute legal advice. Consult a licensed attorney for advice specific to your situation.
Someone broke their promise. Maybe a vendor didn't deliver, a client didn't pay, a partner didn't hold up their end, or a service provider didn't do what they agreed to. A contract exists, it was breached, and you're owed something.
A breach of contract demand letter is the critical first step before litigation. It puts the other party on notice, creates a paper trail, and in many cases resolves the dispute without ever seeing a courtroom.
In This Guide
Types of Contract Breaches
Not all breaches are equal. The type of breach determines what remedies you can demand:
Material Breach
A serious violation that goes to the heart of the contract. The breaching party failed to perform a substantial obligation, undermining the entire purpose of the agreement.
- A web developer was paid $15,000 and delivered nothing
- A supplier delivered products that don't match specifications
- A buyer backed out of a signed purchase agreement
Remedy: You can terminate the contract AND sue for damages.
Minor (Partial) Breach
The other party performed but fell short in some way. The contract's core purpose was mostly fulfilled.
- A contractor finished the job but 2 weeks late
- A vendor delivered 95% of the order on time
- A service had minor quality issues but was substantially completed
Remedy: You can sue for damages caused by the shortfall, but you generally can't terminate the whole contract.
Anticipatory Breach
The other party tells you in advance they won't perform, or their actions make it clear they can't or won't.
- A vendor says they can't meet the delivery date
- A service provider goes out of business before completing the work
- A party starts performing under a different contract that conflicts with yours
Remedy: You don't have to wait for the deadline to pass. You can treat the contract as breached immediately and seek damages.
What Your Breach of Contract Letter Must Include
1. Identify the Contract
Be specific about which agreement was breached:
- Date the contract was signed
- Parties to the agreement
- Subject matter (what the contract was for)
- Any contract or reference number
2. Describe the Breach
Explain exactly how the other party failed to perform:
- Which specific provisions were violated
- What they were supposed to do vs. what they actually did (or didn't do)
- Dates and timeline of the failure
3. Show Your Performance
Demonstrate that you held up your end of the deal:
- Payments you made
- Services or goods you delivered
- Conditions you met
This is important because the other party may argue you breached first.
4. State Your Damages
Quantify what the breach cost you (see next section).
5. Make a Specific Demand
Tell them exactly what you want:
- A specific dollar amount for damages
- Performance of the contract (do what you agreed to do)
- A refund or return of payment
- A combination of the above
6. Set a Deadline
Give a reasonable response time — typically 14-30 days. State what you'll do if they don't comply (file suit, seek arbitration, etc.).
Calculating Contract Damages
Expectation Damages (Most Common)
The amount needed to put you in the position you'd be in if the contract had been performed. This is the default remedy for breach of contract.
Example: Expectation Damages
You hired a web developer for $10,000 to build a site expected to generate $5,000/month. They failed to deliver. Your expectation damages could include:
- Return of the $10,000 payment
- Cost to hire a replacement developer (if higher): $3,000 extra
- Lost revenue during the delay: $15,000 (3 months × $5,000)
- Total: $28,000
Consequential Damages
Additional losses that resulted because of the breach — beyond the contract value itself:
- Lost profits from other business opportunities
- Damage to business reputation
- Costs of finding a replacement
- Penalties you incurred from third parties due to the delay
Important: Consequential damages must have been foreseeable at the time the contract was signed. The breaching party must have known or should have known these damages could result from a breach.
Reliance Damages
Costs you incurred in reliance on the contract being performed:
- Money spent preparing for delivery of goods that never came
- Expenses for a project that was cancelled
- Investments made based on the contract
Liquidated Damages
If your contract includes a liquidated damages clause (a pre-agreed amount for breach), that amount usually controls — as long as it's reasonable and not a penalty.
Breach of Contract Demand Letter Template
[Your Name / Company Name]
[Address]
[City, State ZIP]
[Date]
SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
[Breaching Party Name / Company]
[Address]
[City, State ZIP]
Re: Breach of [Contract Type] Agreement Dated [DATE]
Dear [Name]:
This letter constitutes a formal demand regarding your breach of the [TYPE OF AGREEMENT — e.g., "Service Agreement"] entered into between [YOUR NAME/COMPANY] and [THEIR NAME/COMPANY] on [CONTRACT DATE] (the "Agreement").
The Agreement
Under the Agreement, you were obligated to [DESCRIBE THEIR KEY OBLIGATIONS — e.g., "deliver 500 units of [PRODUCT] by January 15, 2026, at a price of $25 per unit" or "complete the website redesign project by March 1, 2026, for a total fee of $15,000"]. In exchange, [DESCRIBE YOUR OBLIGATIONS — e.g., "I paid a deposit of $7,500 on [DATE], with the balance due upon completion"].
Your Breach
You have materially breached the Agreement by [DESCRIBE SPECIFIC BREACH — e.g., "failing to deliver any product by the agreed deadline" or "delivering work product that does not meet the specifications outlined in Exhibit A of the Agreement"]. Specifically:
- [First specific failure with dates]
- [Second specific failure with dates]
- [Additional failures as applicable]
[If applicable: I notified you of these issues on [DATE(S)] via [email/letter/phone] and gave you an opportunity to cure. As of today, you have failed to remedy the breach.]
My Performance
I have fully performed my obligations under the Agreement, including [LIST — e.g., "making all required payments totaling $[AMOUNT]" or "providing all materials and information needed for you to perform"].
Damages
As a result of your breach, I have suffered the following damages:
| [Category — e.g., "Payments made under the Agreement"] | $[AMOUNT] |
| [Category — e.g., "Cost to hire replacement vendor"] | $[AMOUNT] |
| [Category — e.g., "Lost revenue during delay"] | $[AMOUNT] |
| Total damages | $[TOTAL] |
Demand
I demand [CHOOSE ONE OR COMBINE]:
- Payment of $[AMOUNT] in damages within [14/30] days
- [OR] Full performance of your obligations under the Agreement within [TIMEFRAME]
- [OR] Return of all payments made ($[AMOUNT]) within [14/30] days
If this matter is not resolved by [DEADLINE DATE], I will pursue all available legal remedies, including filing suit for breach of contract, in which I will seek the full amount of damages, consequential damages, attorney's fees, and court costs [where permitted by the Agreement or applicable law].
[If contract has arbitration clause: As provided in Section [X] of the Agreement, I will initiate binding arbitration through [ARBITRATION BODY].]
I would prefer to resolve this matter without litigation. Please contact me at [PHONE/EMAIL] to discuss resolution.
Sincerely,
[Your Signature]
[Your Printed Name]
[Phone Number]
[Email Address]
Enclosures:
- Copy of the Agreement
- Proof of payments made
- Correspondence regarding the breach
- Documentation of damages
Common Breach Scenarios
Freelancer / Service Provider Didn't Deliver
You paid for a service — web design, consulting, marketing — and the provider ghosted or delivered substandard work. Demand a full refund plus the cost difference to hire someone else.
Vendor Didn't Ship Products
You ordered goods that never arrived or arrived defective. Demand a refund and cover damages (the cost to buy the same goods elsewhere at a higher price).
Client Didn't Pay
You performed services and the client won't pay the invoice. This is both a breach of contract and a debt collection matter. Include any late payment provisions from the contract.
Lease Violations
A landlord or tenant violated the lease terms. This could be a landlord failing to make repairs or a commercial tenant violating use restrictions.
Partnership or Business Agreement
A business partner isn't meeting their obligations — not contributing capital, competing in violation of a non-compete, or mismanaging company funds.
After You Send the Letter
Check the Contract for Dispute Resolution Clauses
Before filing suit, check whether your contract requires:
- Mediation: A neutral mediator helps you negotiate
- Arbitration: A private judge decides the case (often binding)
- Notice and cure period: You may need to give the other party time to fix the breach before suing
If They Don't Respond
- Small claims court for amounts under your state's limit ($5,000-$25,000 depending on state)
- Civil court for larger amounts (consider hiring an attorney)
- Arbitration if the contract requires it
Statute of Limitations
Don't wait too long. Breach of contract claims have deadlines:
- Written contracts: 4-6 years in most states (some up to 10)
- Oral contracts: 2-4 years in most states
- The clock typically starts when the breach occurs, not when you discover it
Ready to Send Your Breach of Contract Demand Letter?
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Start Your Demand LetterKey Takeaways
- A material breach lets you terminate the contract AND sue for damages; a minor breach only allows damages
- Expectation damages put you in the position you'd be in if the contract had been performed
- Always demonstrate that you held up your end of the deal before demanding performance from the other side
- Check your contract for arbitration or mediation clauses before threatening to sue
- About 60% of contract disputes settle after a demand letter, before any lawsuit
- Written contracts have a 4-6 year statute of limitations in most states
Related Articles
- Demand Letter to Contractor: Get Your Money Back or Get the Job Done
- Demand Letter for Money Owed: How to Get Your Money Back
- How to Write a Demand Letter: Complete Guide
- Can You Send a Demand Letter Without a Lawyer?
Free Tools: Try our Damages Calculator, Dispute Diagnostic Quiz, or Statute of Limitations Lookup.