Unfortunately, it happens often enough that a contracting party fails to fulfill its obligations or fails to do so on time or correctly. A notice of default gives this party another opportunity to (correctly) comply within a reasonable period. After the expiry of the appropriate 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 necessary. Examples include situations in which performance is permanently impossible, such as a photographer who does not appear at the wedding. In some cases, default commences without notice of default, for example, if a fatal deadline has been stipulated to fulfill the obligations.
You can use the sample letter below to declare your contracting party in default. However, every situation is different; you must complete the letter and be aware that you are 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
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 to which the party has failed to comply. 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 the stipulated period expires, default commences, and I will be forced to take legal action. I will also claim statutory interest and any extrajudicial collection costs and damages.
[Your name and signature]
[Make sure your address is listed on the letter].
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.