Cease and Desist Letter
Breach of Contract
Halt! A cease and desist letter, or violation letter, is sent to an individual or entity engaging in unlawful activity, asking that they immediately cease the unlawful action. A cease and desist letter is an initial attempt to resolve the issue before escalating to legal action. It provides the receiving party the opportunity to resolve the matter.
Cease and desist letters are commonly found in breach of contract actions. For example, if an employee signs an employment agreement when they are hired, they agree not to compete with the company’s business six months after the employment relationship ends. However, if the ex-employee opens shop across the street, they are in breach of the non-compete clause of their employment agreement.
At this juncture, the employer may send a cease and desist letter to ask the ex-employee to immediately stop their actions because they are in breach of the contract. If the ex-employee does not respond or does not cease the unlawful activity, the employer may proceed to seek legal action.
When is a Cease and Desist Letter Needed?
A cease and desist letter can protect your company from a breaching party. A breach of contract can come with serious financial consequences. A cease and desist letter is the initial step and places the breaching party on notice not only of their specific breach but for the consequences if they do not immediately stop the activity. Basically, it is a “nice” way to ask the other party to stop, or else legal action will follow.
These can also sometimes be issued in instances where debt collection agencies are over-stepping their bounds and bordering on harassment. This starts to get into the Fair Debt Collection Practices Act, where debt collection agencies are limited to what they can say or do to those being sought for debt repayments (governing phone calls, in-person visits, etc).
Timing of a Cease and Desist Order
As with anything in contract law, time is of the essence. As soon as you are aware of the other party’s breach, it is time to draft a cease and desist letter. The later you wait, the more damage you could incur. You want to mitigate as much of the damage as possible. It is essential to provide the other party notice and an opportunity to cure the violation before seeking further legal action.
Essential Elements of a Cease and Desist Letter
The specifics of the cease and desist letter will depend on the situation. It is important to first identify which part of the contract the other party has breached, triggering the letter. Here are the five basic components of a typical cease and desist letter:
- Recipient(s) – Identify the individual(s) or entities the letter is being addressed to.
- Sender(s) – Identify the individual (s) or entities the letter is coming from and the contact information so they can adequately respond to the letter.
- Reason for the Letter – Spell out the breaching party’s unlawful behavior and, if possible, attach the contract and point out where and how they are in breach.
- Potential Legal Action – The letter should expressly state that if the other party fails to cease the unlawful behavior, legal action will follow.
- Dates – There are two important dates that should be included in a cease and desist letter. One is the date it is being sent. The other is the date the breaching party has to respond or stop the unlawful activity. After that date, if the other party has not ceased the behavior, the other party can proceed to legal action.
A good rule of thumb is to send a cease and desist letter by U.S. certified mail. Certified mail requires the person the letter is addressed to, or any individual qualified to accept service on their behalf, to sign for the letter. If the matter continues to litigation, it proves the other party did receive informed notice, yet continued the unlawful activity.
A few common breaches of an employment contract include violating the non-compete provision by working for a competitor. Another common occurrence is breaching the agreement’s confidentiality clause by revealing the other party’s proprietary and protected information. Other concerns can include issues with intellectual property.
Other broad instances can include trademark infringement, copyright infringement, and other infringing activities which impact brands and their products.
Common Mistakes to Avoid in a Cease and Desist Demand Letter
Always remain professional. The goal of the letter is to show a good-faith effort to resolve an issue without entertaining legal action. The letter should be firm and express the serious nature of the breach.
Another common mistake is failing to send one. It can be an expensive mistake. Not only could the breach potentially harm your business, but litigation is also costly. Moreover, litigation is not a quick process; it is quite lengthy and can take years to resolve.
It is always a good idea to consult with an experienced attorney, get legal advice, and review your cease and desist letter and know your legal rights and limitations. An attorney can review the contract and provide helpful information to ensure the letter’s legality and weight.
What is the easiest way to draft a Cease and Desist letter?
A cease and desist letter can be drafted quickly and easily on ApproveMe. Our template is designed to be user-friendly to serve as a general guide to help you customize your own cease and desist letter. We have laid most of the foundation for you, saving you time and money.
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NOTICE TO CEASE AND DESIST
____ / _____/ 20__
Re: Breach of Contract
To Whom it May Concern:
Please consider this letter formal notification that you are to CEASE AND DESIST from any further violation and breach of the ______________________________ that you signed on ______________. The contract which was breached or violated by: ____________________________________________________________________________________________________________________________________________________________
If you do not cease the above-referenced breach or violation a lawsuit will be filed against you.
If we forced to commence a lawsuit to address these intentionally disruptive and damaging actions, be advised that we will seek recovery of all attorneys’ fees and costs incurred herein as a result. While we hope this is not necessary, we are prepared to pursue whatever action necessary on our behalf to ensure our business operations continue uninterrupted.
We will not send another warning letter. If you do not confirm in writing by ______________________ that you will cease violating the contract a lawsuit will be commenced immediately.
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