If you operate a Massachusetts business you may be familiar with what is known as a “93A Demand Letter.” If you do not know what a 93A Demand Letter is and your business receives a letter from a consumer or even another business, you may have received a Demand Letter and will need to stop everything that you are doing now and take a moment to read about what you need to do below.
Demand…for a Reason
The 93A Demand Letter is so named for a reason. Your business is being demanded to respond to an allegation of deceptive or unfair trade practices. Let me stress here, that A FAILURE TO RESPOND TO A 93A DEMAND LETTER CAN BE VERY EXPENSIVE.
Demand Letter Timing
M.G.L. Title XV, Chapter 93A sets forth the parameters for a response to a demand letter. As a business, under Chapter 93A, you are required to respond to this demand within 30 days. The response must be a “good faith” response. Failing to respond to such a letter might result in your business being awarded up to three times the amount of actual damages that the consumer or other business is alleging as well as attorney’s fees and court and other costs.
The 30-day window to respond to a demand letter is a crucial time period. If you have received such a letter please contact an attorney immediately and have a response crafted that demonstrates your intent to investigate the matter at a minimum. Keep in mind that any response to a 93A Demand Letter must be made in good faith. It may be insufficient to respond to a Demand Letter with only an investigation, particularly if the consumer or business has sufficient grounds for the allegation and damages. If the party alleging that your business has engaged in unfair or deceptive practices and even the slightest chance exists that they may be correct, you will want to address the issue immediately.
Settlement
Massachusetts in general, and the judicial system in particular, encourages individuals and businesses to settle matters on their own. The use or abuse of the court system to deal with every dispute is burdensome and unnecessary. If your business has received a 93A Demand Letter you may need to consider settlement. Again, contacting a business attorney with experience in settling these matters is crucial. As the business in this matter, you want your side to be represented and for that representation to be based on an analysis of the legal issues involved in the particular matter. While a business may certainly respond to a 93A Demand Letter without the representation of an attorney, unless you have an attorney on staff, you may be putting your business at a disadvantage in doing so.
Sometimes a settlement may be necessary. When this is the case, it may be possible to enter into arbitration or mediation if each party cannot amicably agree on an appropriate settlement. Mediation or arbitration can be less expensive options for a business, because court costs and attorney’s fees quickly add up when a legal matter is brought into litigation. Consider mediating or arbitration as an alternative when there is no agreement on a resolution, rather than proceeding to intervention in the courts.
The Ideal Resolution
Barring of course the consumer or business who has sent the Demand Letter walking away from the table, which is unlikely to happen if that individual or business has grounds for a violation of Chapter 93A, the next best step would be an out of court (and out of arbitration or mediation) settlement. Getting each side to agree to a fair resolution can be challenging, but, fairness is part of the “good faith” analysis that a court will consider should the dispute under Chapter 93A be brought before it. Do not allow your temper to take hold in this situation. Instead, hire an attorney with the negotiating skills and knowledge of the rights your business may have under the circumstances to arrive at an offer and settlement agreement that is fair.
Remember that failing to respond to a 93A demand letter within the statutorily proscribed 30-day limit or negotiating in bad faith can result in bad outcomes for the business. Do not be a victim of a carefully crafted demand letter.
DISCLAIMER:
The information provided in the pages and posts of this website are for general informational purposes only. The information presented on this site is not legal advice, and no attorney-client relationship is formed by the use of this site.
