Your Business Received a Chapter 93A Demand Letter: Now What?

Massachusetts Business Attorney · Business Law

A letter arrives saying your company violated Chapter 93A, the Massachusetts consumer protection law, and demanding money. It is tempting to set it aside as “only a letter.” That is a mistake. The way a business responds in the next 30 days can decide whether a dispute ends with a reasonable payment, or turns into a lawsuit with the possibility of double or triple damages and the other side’s attorney’s fees.

This guide explains what a 93A demand letter is, when one is actually required, what a valid demand must contain, how a reasonable written settlement offer can cap your exposure, and a step-by-step plan for responding. For what conduct the statute prohibits in the first place, see our article on what makes a business practice unfair or deceptive under Chapter 93A.

What a 93A demand letter is, and when it is required

Chapter 93A has two private enforcement sections, and the demand letter belongs to only one of them.

• Section 9 covers consumers and others injured by an unfair or deceptive act or practice, other than those entitled to sue under § 11. Under § 9(3), at least 30 days before filing suit, the claimant must mail or deliver a written demand for relief to the prospective respondent.
• Section 11 covers a person engaged in trade or commerce who claims a loss caused by another business. Section 11 contains no demand-letter requirement.

Even under § 9, the statute lists exceptions. The demand requirement does not apply if the claim is asserted as a counterclaim or cross-claim, or if the prospective respondent does not maintain a place of business or does not keep assets in Massachusetts.

Why does this matter to the business that received the letter? Because the 30-day tender protection discussed below is tied to the § 9 demand. If the sender is another business suing under § 11, that business may send a “93A letter” anyway as a negotiating step, but the settlement tool that § 11 gives you works differently. For the business-to-business side in more detail, see Chapter 93A demand letters when a business sues a business.

What a valid § 9 demand must contain

Section 9(3) requires a written demand for relief “identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered.” The Supreme Judicial Court (SJC) treats this as a real requirement, not a formality:

• In Entrialgo v. Twin City Dodge, Inc. (1975), the SJC described a demand letter listing the specific deceptive practices claimed as a prerequisite to suit.
• In Spring v. Geriatric Authority of Holyoke (1985), the SJC explained that the letter has two purposes: to encourage negotiation and settlement by giving the business notice of the claim, and to operate as a control on the amount of damages the claimant can ultimately recover. Because the letter in that case did not describe any injury, the court held it did not satisfy the prerequisite to suit.

When you read the letter, check three things:

• Who is the claimant? The letter should make clear who is making the claim. A vague reference to “our clients” or “customers” makes it harder to evaluate and to settle.
• Who is the respondent? Look at exactly which company, affiliate or individual the letter is addressed to. Businesses with several entities, trade names or owners should note whether the right party was named, and any written offer should state clearly which parties and claims it is meant to resolve.
• What act and what injury? The letter should describe what you supposedly did and how the claimant was harmed. A letter that lists conduct but no injury, or an injury with no connection to the conduct, may be defective. That is something to raise in your response, not a reason to ignore the letter.

A defect in the demand can be a defense later. But a business that relies only on a technical objection, and makes no reasonable offer, gives up the protection described in the next section.

How a reasonable written tender caps exposure

This is the most important part of the statute for a business that has received a § 9 demand. Under § 9(3), a business that, within 30 days of the mailing or delivery of the demand, makes a written tender of settlement that the claimant rejects may later file the tender, with an affidavit about its rejection, and thereby limit any recovery to the relief tendered, if the court finds the relief tendered was reasonable in relation to the injury actually suffered.

A reasonable tender does two things:

• It caps damages. If the court finds the offer reasonable, the claimant’s recovery is limited to what you offered. Double or triple damages are not available on top of it.
• It cuts off later attorney’s fees. Under § 9(4), the court must deny recovery of attorney’s fees and costs incurred after the rejection of a reasonable written offer of settlement made within 30 days of the mailing or delivery of the demand.

In Kohl v. Silver Lake Motors, Inc. (1976), the SJC applied these rules and said three things worth knowing:

• The business has the burden of proving that its tender was reasonable.
• The test is whether the offer is reasonable in relation to the injury the claimant actually suffered, which may be quite different from the amount the letter demands.
• In measuring reasonableness, the judge should not treat the claimant’s attorney’s fees as part of the “injury actually suffered.” Recovery may not exceed the relief tendered, plus attorney’s fees incurred before the claimant rejected the tender.

Two practical points follow. First, the tender must be in writing and made within the 30 days. A phone call or a late offer does not get the statutory benefit. Second, “reasonable” is judged by the court after the fact, so the offer should be built on a real look at the claimant’s actual loss. An offer that seems generous to you may be found unreasonable if the actual loss turns out to be larger.

Can a low offer, or no offer, be defensible?

Sometimes. If the claimant’s actual injury is small, a small offer can be reasonable even when the demand is large. And a business that has investigated and concludes, on an objectively sound basis, that it did nothing wrong is not required to pay. But a business that makes no offer gets no cap and no fee cutoff. In Heller v. Silverbranch Construction Corp. (1978), the defendant made no offer of settlement, so the statutory limit on damages did not apply, and the SJC upheld multiple damages for a bad-faith refusal. A “no offer” response should be a deliberate decision made after investigation, not a default.

The § 11 version and the out-of-state version

Under § 11, a business defendant may tender, with its answer, a written offer of settlement for single damages. If the plaintiff rejects it and the court finds the relief tendered was reasonable in relation to the injury actually suffered, the court may not award more than single damages. A business that does not maintain a place of business or keep assets in Massachusetts, and so is not entitled to a § 9 demand, may still use the § 9 protection by making a written offer of relief and paying the rejected tender into court as soon as practicable after receiving notice of the lawsuit.

The second path to multiple damages: bad-faith refusal

Most people know that 93A allows double or triple damages for a “willful or knowing” violation. Section 9 adds a second, separate path. Multiple damages are also available if “the refusal to grant relief upon demand was made in bad faith with knowledge or reason to know” that the conduct violated the statute.

This matters because it turns on how you respond to the letter, not just on what happened before it. In Heller, the SJC described the multiple-damages provision as an attempt to promote prelitigation settlements. On timing, the court said the relevant knowledge or reason to know is what exists after the business receives the demand. And the standard is objective: it requires the business to investigate the facts and consider the legal precedents. In Calimlim v. Foreign Car Center, Inc. (1984), the SJC said the adequacy of a response is judged by whether, in the circumstances and in light of the claimant’s demands, the offer is reasonable. There, the business denied the allegations and offered only to give up collecting a small disputed repair bill. The court called that offer patently unreasonable.

The practical lesson: a business can act honestly before the letter arrives and still face multiple damages if it refuses relief, after the demand, when it knew or should have known the conduct was unlawful. Investigating during the 30 days is part of your protection.

One more exposure point. Section 9(3) provides that the actual damages to be multiplied are the amount of the judgment on all claims arising out of the same and underlying transaction or occurrence, regardless of whether insurance coverage is available. For more on how multiplied damages work, see “I can get 3x the damages in a 93A lawsuit.”

A step-by-step response plan

1. Calendar the deadline today. The tender window under § 9(3) runs 30 days from the mailing or delivery of the demand. Record the date on the letter, the postmark and the date you received it, and plan around the earliest. Do not wait until day 29.
2. Preserve documents. Keep contracts, invoices, emails, texts, call notes, photos, advertising and website pages that relate to the transaction. Tell the employees involved not to delete anything.
3. Investigate the facts. Talk to the people who dealt with the claimant. Pull the file. Figure out what actually happened, and what the claimant actually lost, separately from what the letter says.
4. Check your insurance. Review your liability and other policies and consider giving your carrier prompt notice. Whether a policy covers a 93A claim depends on its terms, but late notice can create problems of its own.
5. Evaluate the demand itself. Is this a § 9 demand or a § 11 business dispute? Does it identify the claimant, describe the act and describe the injury? Was the right party named?
6. Assess exposure and defenses. Consider whether the conduct was in trade or commerce, whether this is really a contract dispute, whether the claimant was actually harmed, and whether the claim is within the four-year limitations period under G.L. c. 260, § 5A. See our article on defenses to Chapter 93A claims.
7. Send a written response within 30 days. Address the allegations, state your position, and, if warranted, make a clear written offer of settlement tied to the claimant’s actual loss. Keep proof of when and how it was sent.
8. Talk to counsel early. Whether to make an offer, and how much, is a judgment call with real consequences. It is easier to get it right in week one than in week four.

Settling the dispute: negotiation, mediation or arbitration

Chapter 93A is built to push both sides toward settlement before a lawsuit is filed, and most demands are resolved that way. Often the written tender opens the discussion, and the two sides then work toward a figure both can accept. Put any settlement in a written agreement that releases the claims raised in the letter and names every company and person it is meant to cover.

If direct negotiation stalls, consider mediation. A neutral mediator works with both sides to find an agreement, and neither side is bound unless it agrees. Arbitration is different: an arbitrator decides the dispute, usually in a final and binding award, and it is generally available only if both sides agree to it, either in an existing contract or after the dispute arises. Check your contract with the claimant for a mediation or arbitration clause. Either route is usually faster and less expensive than litigation.

Keep the tone professional throughout, even if the letter feels unfair. Everything you write may later be read by a judge deciding whether your response was reasonable and made in good faith.

Should you write the response yourself?

You can, and some owners do. The risk is that the response is read later by a judge deciding whether your refusal was in bad faith or whether your offer was reasonable. An angry or dismissive letter, an admission made in frustration, or an offer that leaves out part of the claimant’s actual loss can each cost more than the original dispute.

Frequently asked questions

How long does my business have to respond to a 93A demand letter?

To get the statutory protection of a reasonable tender under § 9(3), the written offer must be made within 30 days of the mailing or delivery of the demand. Count conservatively from the earliest date.

What happens if we ignore the letter?

The claimant may sue after the 30 days pass. Without a reasonable written tender, there is no cap on recovery and no cutoff of the claimant’s attorney’s fees, and a refusal to grant relief can itself support double or triple damages if made in bad faith with knowledge or reason to know the conduct was unlawful.

Does a business have to send a demand letter before suing another business under 93A?

No. The demand requirement is in § 9. Section 11, which covers business claims, has no demand-letter requirement. Under § 11, a defendant may tender a written offer of single damages with its answer.

Do we have to pay what the letter demands?

No. Under § 9(3) and Kohl, a tender is judged by whether it is reasonable in relation to the injury the claimant actually suffered. A demand can overstate that injury. But the offer should be grounded in a real assessment of the actual loss.

Getting help with a Chapter 93A demand

The 30-day window is short, and the decisions made inside it shape everything that follows. If your company has received a 93A demand letter, see our Massachusetts business law services or contact our office at 978-273-8337. I can review the letter, help you investigate, and help you decide whether and how to make a written offer before the deadline.

About the Author

Richard Alan Gaudet, Esq. is a Massachusetts attorney at the Law Offices of Richard Alan Gaudet, LLC in Middleton, Massachusetts, who advises businesses and individuals on collections, Chapter 93A claims and commercial disputes. His practice focuses on professional license defense, business law and litigation, family law, and landlord representation, serving clients across Northern, Eastern, and Central Massachusetts. Reach him at 978-273-8337 or rgaudet@gaudetlawoffice.com. Office: 35 Village Rd., Ste 100, Middleton, MA 01949.

ABOUT THIS ARTICLE

This article was prepared by a Massachusetts attorney and is provided solely for general informational and educational purposes directed to members of the general public. It does not constitute legal advice and does not create an attorney-client relationship. The law applicable to any particular situation depends on the specific facts and circumstances of that matter. Readers are encouraged to seek the advice of a licensed Massachusetts attorney before taking any action.