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The Settlement Demand Letter is a critical legal instrument in the Philippine legal system, serving as a formal attempt to resolve disputes before pursuing litigation. It is typically used when parties seek to recover damages, enforce contractual obligations, or resolve conflicts through negotiation rather than immediate court action. This document must comply with Philippine civil law requirements and alternative dispute resolution frameworks, particularly the Alternative Dispute Resolution Act of 2004 (RA 9285) and relevant provisions of the Civil Code of the Philippines. A well-crafted Settlement Demand Letter should clearly state the legal and factual basis for the claim, quantify damages, propose reasonable settlement terms, and provide a reasonable timeframe for response. It serves as documentation of good faith efforts to resolve disputes amicably, which may be significant if the matter eventually proceeds to court.

1. Letterhead and Date: Professional letterhead including sender's complete contact information and the current date

2. Recipient Details: Complete name and address of the recipient, including any relevant business or organizational affiliation

3. Subject Line: Clear indication that this is a settlement demand letter and brief reference to the dispute

4. Opening Paragraph: Formal introduction identifying the sender and their authority to make the demand

5. Factual Background: Concise but complete description of the relevant facts, including dates, amounts, and specific incidents giving rise to the claim

6. Legal Basis: Clear statement of the legal grounds for the claim, citing relevant laws or contractual provisions

7. Damages or Losses: Detailed itemization of all damages, losses, or amounts being claimed

8. Settlement Demand: Specific settlement amount or terms being demanded, with clear statement of what this amount covers

9. Response Timeline: Clear deadline for response and consequences of non-response or rejection

10. Closure: Professional closing indicating openness to discussion while maintaining the seriousness of the demand

11. Signature Block: Complete signature block with name, title, and contact information