A demand letter is a formal written request that asks for something to be done or given by a specific deadline. In legal terms, it refers to a document sent by an attorney on behalf of their client to another party, usually an insurance company, in which the client demands payment or resolution of a dispute. The demand letter typically outlines the facts and law relevant to the case, explains why the client is entitled to compensation or resolution, and sets forth the specific amount or action demanded by the client. If the other party fails to respond favorably within a specified time period, it may lead to further legal action being taken.