What is a notice of default?
Unfortunately, it happens often enough that a contracting party fails to fulfil its obligations, or fails to do so on time or properly. A notice of default gives this party another opportunity to (properly) comply within a reasonable period. After expiry of the reasonable period – mentioned in the letter – the debtor is in default. Default is required to be able to dissolve the contract or claim damages, for example. Depending on the circumstances, default may not be required. Examples include situations where performance is permanently impossible, such as a photographer who does not appear at the wedding.
Default without notice?
In some situations, default occurs without notice of default, for example if a fatal deadline has been stipulated to fulfil obligations.
Sample letter of formal notice
You can use the sample letter below to declare your contracting party in default. However, every situation is different; you will therefore have to complete the letter yourself and are ultimately responsible for its content. Remember to send the letter by registered mail and keep all necessary evidence (copy, proof of posting, etc.).
[City/village where you are writing the letter], [date]
Subject: Notice of default
Dear Sir/Madam,
I entered into [an/the attached] agreement with you on [date] [invoice number can be added in brackets if necessary]. [You/name of company] failed to comply with the agreement.
The agreement obliges [you/name company] to [explain the obligations the party has failed to comply with. Do this somewhat comprehensively but do not go into too much detail].
I hereby declare you in default and offer you one more chance to (properly) comply within 14 (fourteen) working days from the date [depending on the circumstances, you may adjust the period; the law requires a reasonable period]. After expiry of the stipulated period, default commences and I will be forced to take legal action. I will then also claim statutory interest and any extrajudicial collection costs and damages.
Sincerely,
[Your name and signature]
[Make sure your address is listed on the letter].
Looking for more than a formal notice example?
You should know that the above formal notice is simple and does not lend itself to every situation. Would you like help to draft a notice of default or be wholly relieved of this task? Would you like to know whether and from when you can claim statutory interest and damages? Do you need clarification on whether sending a notice of default is necessary, or do you doubt whether the default is required in your situation? Then do not hesitate and contact Law & More. Our lawyers are experts in contract law and will be happy to help you with all your questions and concerns.
