Document background
A Demand Letter for Payment of Debt is a crucial document in Nigerian business and legal practice, typically used when informal attempts to collect payment have been unsuccessful. This document serves as a formal notification to debtors and is often a prerequisite before initiating legal proceedings in Nigerian courts. The letter must be drafted in compliance with Nigerian contract law, debt recovery regulations, and financial legislation, including requirements set forth by the Central Bank of Nigeria for financial institutions. It should clearly state the debt amount, origin, payment history, and provide a reasonable deadline for payment. The document is particularly important as it creates a paper trail of attempted collection and can serve as evidence in future legal proceedings. Timing is crucial, as the letter must be sent within the statute of limitations for debt collection under Nigerian law, which is typically six years for simple contracts.
