How to serve a demand for payment

Produced in partnership with James Hannant of Guildhall Chambers

Practice notes

How to serve a demand for payment

Produced in partnership with James Hannant of Guildhall Chambers

Practice notes

A demand for payment is a formal demand made in accordance with the Contractual Requirements underpinning the liability which the party issuing the demand is seeking to enforce.

A demand will be necessary where the contract which exists between the parties requires a demand to be made in order for a party’s obligation to make payment to crystallise.

Such a situation is likely to arise in the following circumstances:

•
where a creditor wishes to realise its security
•
where there has been a default under an ‘on demand’ facility
•
where a party wishes to rely upon a guarantee; and
•
where non-payment of a demand equates to an event of default under the contract

The consequences of making a demand may include:

•
crystallisation of a cause of action which gives rise to a party’s entitlement to commence proceedings
•
commencement of the limitation period
•
establishing the date from which a lender’s right to repayment of the loan becomes due; and
•
establishing the date from which a lender’s

James Hannant

Guildhall Chambers

James specialises in commercial litigation with an emphasis on both corporate and personal insolvency. He is frequently instructed by officeholders, directors and creditors in relation to a number of aspects of insolvency law. These include winding-up petitions, transaction avoidance claims and misfeasance claims. He also undertakes personal bankruptcy work which has included annulment applications, transaction avoidance claims and possession and sale applications.

In addition, James’ has a varied commercial practice which incorporates disputes relating to the sale and supply of goods and services, contractual claims and matters involving aspects of the law of agency and guarantee claims.

James has spoken at a number of seminars and events including those run by R3.

Jurisdiction(s):

United Kingdom

Key definition:

Contract definition

What does Contract mean?

A contract is a legally binding promise (oral or in writing) by one person to fulfil an obligation to another person in return for consideration. A binding contract comprises four elements: offer, acceptance, consideration and intention to create legal relations.

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