The Process Server (TPS) When Is It Appropriate to Threaten Legal Action?

1. When All Other Resolution Attempts Have Failed

Before resorting to lawsuits, it’s best to attempt negotiation, mediation, or settlement.

If the other party refuses to cooperate, continues to violate an agreement, or ignores all requests, a legal threat may be necessary.

Example:
A contractor fails to complete a construction job despite multiple follow-ups. The homeowner tries negotiation and mediation, but the contractor refuses to respond. Now, the homeowner sends a formal demand letter threatening legal action.

If diplomacy doesn’t work, a legal threat may be the next step.

2. When a Contract or Agreement Has Been Violated

Contracts exist for a reason—if one party fails to comply, legal action may be required.

A legal threat puts the other party on notice and may encourage them to settle before a lawsuit.

Example:
A business hires a vendor to deliver materials, but the vendor fails to deliver and ignores all emails. The business sends a letter demanding compliance or threatens to sue for damages.

Contracts mean nothing if they aren’t enforced.

3. When Someone Has Caused You Financial or Personal Harm

If another party’s actions have directly caused you harm, legal action may be necessary.

This applies to personal injury, fraud, defamation, and business losses.

Example:
A former employee publicly spreads false accusations about a company, causing customers to leave. The company threatens a defamation lawsuit unless the false statements are retracted.

If you’ve suffered real damages, a legal threat may be appropriate.

4. When You Need to Protect Intellectual Property or Business Rights

If someone steals your ideas, infringes on trademarks, or uses copyrighted material without permission, a legal warning is often the first step.

Example:
A company discovers that a competitor is using its patented technology without a license. They send a cease-and-desist letter threatening a lawsuit if the infringement continues.

Protecting your brand and property is critical in business.

5. When Debt or Payments Are Owed to You

If someone owes you money and refuses to pay despite multiple requests, a legal threat may be necessary.

This applies to loans, business transactions, unpaid invoices, and services rendered.

Example:
A freelancer completes a project, but the client refuses to pay and stops responding. The freelancer sends a demand letter warning of potential legal action.

A lawsuit may be the only way to recover unpaid money.

6. When You Need to Enforce Your Legal Rights

If someone infringes on your legal rights—whether it’s property disputes, workplace violations, or consumer fraud—a legal threat can push them to comply.

Example:
A landlord refuses to return a security deposit without cause. The tenant sends a legal notice threatening small claims court action.

When someone violates your rights, don’t back down.