California Demand Letter

Introduction

Key Things to Know

1. 1

   California requires a written notice under the Consumers Legal Remedies Act at least 30 days before you sue for damages in many consumer disputes, sent by certified or registered mail, return receipt requested (Civ. Code 1782(a)).

2. 2

   If the business gives, or agrees within a reasonable time to give, an appropriate correction, repair, replacement, or other remedy within 30 days after receiving that notice, you cannot bring an individual damages claim under the CLRA (Civ. Code 1782(b)).

3. 3

   The CLRA does not award general multiplied damages. Treble damages are mandatory only for a violation of Civil Code Section 1770(a)(24); otherwise remedies are actual damages, restitution, an injunction, and punitive damages (Civ. Code 1780(a), (c)).

4. 4

   A written demand letter is not otherwise required by California law, but a small-claims plaintiff must first ask the defendant to pay, in person, in writing, or by phone (Code Civ. Proc. Section 116.320(b)). Separately, a certified-mail demand under Civil Code 1719 for a dishonored check can unlock treble damages, not less than $100 nor more than $1,500, if the drawer does not pay within 30 days of mailing, unless the check was a stop payment made to resolve a good-faith dispute, and only if you first made a reasonable effort to resolve the dispute (Civ. Code 1719(e)).

5. 5

   California's Rosenthal Fair Debt Collection Practices Act (Civ. Code 1788 et seq.) covers a business that regularly collects debts, including its own customers' debts, in the ordinary course of business, not just outside collection agencies, but only for consumer debt or covered commercial debt up to $500,000 owed by a natural person to a lender, commercial financing provider or debt buyer (Civ. Code 1788.2(c), (l)-(n)); it bars threatening arrest unless the arrest is actually contemplated and permitted by law, or a false criminal accusation (Civ. Code 1788.10(b), (e)).

6. 6

   Mind your deadline to sue: four years for a written contract or an open account with written entries, two years for an oral contract, and three years for damage to property (Code Civ. Proc. 337, 339, 338).

7. 7

   Before that deadline runs, a natural person can sue for up to $12,500 in California Small Claims Court, where attorneys generally may not represent either side (Code Civ. Proc. 116.221, 116.530).

California Requirements for Demand Letter

• CLRA 30-Day Pre-Suit Notice

  Before suing for damages under the Consumers Legal Remedies Act, send written notice by certified or registered mail, return receipt requested, naming the practices you allege violate Civil Code Section 1770. The notice must go out at least 30 days before you file (Civ. Code 1782(a)).

• Cure Bar Defeats Individual Damages Claims

  If the business gives, or agrees within a reasonable time to give, an appropriate correction, repair, replacement, or other remedy within 30 days after receiving your CLRA notice, you cannot maintain an individual damages action (Civ. Code 1782(b)).

• CLRA Claims Expire After 3 Years

  A Consumers Legal Remedies Act claim must be filed within three years of the act or practice alleged (Civ. Code 1783).

• Bad-Check Demand Unlocks Treble Damages

  A written demand mailed by certified mail under Civil Code 1719 must inform the drawer of the provisions of Civil Code 1719 and state the check amount and the service charge, and gives the drawer of a dishonored check 30 days from the mailing date to pay. If they do not, you may recover the check amount plus treble damages, not less than $100 nor more than $1,500, unless the check was a stop payment made to resolve a good-faith dispute, and only if you first made a reasonable effort to resolve the dispute (Civ. Code 1719(a)(2), (e)). The drawer is liable only if every requirement of Section 1719 is met (Civ. Code 1719(j)(1)), and for a stop-payment check the demand must be in substantially the statutory form set out in Civ. Code 1719(c).

• Rosenthal Act Covers First-Party Creditors

  California's Rosenthal Fair Debt Collection Practices Act applies to a business that regularly collects debts, including its own customers' debts, in the ordinary course of business, not only outside collection agencies, but only for consumer debt or covered commercial debt up to $500,000 owed by a natural person to a lender, commercial financing provider or debt buyer (Civ. Code 1788.2(c), (l)-(n)). It bars threatening arrest unless actually contemplated and permitted by law, threatening a false criminal accusation, or claiming an attorney's involvement that is not real (Civ. Code 1788.10, 1788.13).

• Statute of Limitations Varies by Contract Type

  A written contract or an open account with written entries gives you four years to sue, an oral contract gives two years, and damage to property gives three years (Code Civ. Proc. 337, 339, 338).

• Interest Runs From Breach, Not From Your Demand

  For a contract entered into after January 1, 1986 that sets no interest rate and is not a note secured by a deed of trust, California law adds interest at 10 percent per year after breach, running from the date your right to recover became fixed, not from when you send a demand letter; for an amount that is not certain, the court sets the start date, no earlier than the date suit is filed (Civ. Code 3289(b), 3287(a)-(b)). This rate does not apply to non-contract claims such as property damage.

• Send the CLRA Notice by Certified or Registered Mail

  The Consumers Legal Remedies Act notice must be sent by certified or registered mail, return receipt requested, to the place where the transaction occurred or to the business's principal place of business in California (Civ. Code 1782(a)).

• Small Claims Limit and Attorney Restrictions

  A natural person may sue for up to $12,500 in California Small Claims Court (Code Civ. Proc. 116.221). Attorneys may not represent either side in small claims except in limited circumstances (Code Civ. Proc. 116.530).