A Washington business owes your business money. What does a demand letter actually need to say?
B2B collections look easier than they are. Both sides have counsel, both sides know the litigation math, and most disputes that get to the demand-letter stage have already passed through a phone call and an "I will look into it" stall. The demand letter that actually moves the matter has to do three things at once: prove the debt is liquidated (signed agreement plus accepted invoice or account-stated facts), identify the fee-recovery posture under RCW 4.84.330 if any clause is on the page, and name every party legally on the hook (the entity plus any personal guarantor). This page walks the structure.
The four facts that make or break a B2B collection
- Signed acceptance: a master services agreement, statement of work, purchase order with debtor's signature, or click-acceptance log. The cleanest record is a signed SOW with the debtor's authorized signatory; the next-cleanest is an emailed PO followed by performance.
- Personal guaranty: a separate guaranty signed by an individual (often the principal of the debtor entity). A guaranty page is the leverage that converts a judgment-proof shell into a real collection target. Without one, you are betting on the entity's solvency.
- Account stated: a record that the debtor received the invoices and did not dispute the amount within a reasonable time. Washington recognizes the account-stated theory: when a creditor sends an invoice or statement and the debtor's silence over a reasonable period reads as agreement, the amount itself is treated as liquidated. Account stated is the secondary theory that keeps the debtor from manufacturing a quality dispute after the fact.
- Fee clause: any unilateral fee clause in the underlying contract activates RCW 4.84.330 and converts the matter from a fee-eating action to a fee-recovery action. Even a one-sentence "creditor shall recover its attorney fees in any action to collect" turns into a prevailing-party clause by statute.
The personal guaranty question
The single most important pre-litigation question on a B2B collection is whether there is a personal guaranty on the contract. The guaranty is what allows the demand letter to name an individual as well as the entity, and what allows the eventual judgment to attach to that individual's assets. Three issues recur on Washington guaranties:
- Was the guaranty signed in an individual capacity or in a representative one? "John Smith, President" on the guaranty page is often interpreted as a corporate signature, not a personal one. The cleanest guaranty signature is "John Smith, individually as guarantor."
- Is the guaranty continuing (covers future amounts due as well as the current ones) or limited to one transaction? A continuing guaranty is what you want for an ongoing supply or services relationship.
- Does the guaranty waive the suretyship defenses (notice of default, demand on principal first, modification of the principal contract)? Most modern commercial guaranties do; verify before the demand letter names the guarantor.
If there is no guaranty and the debtor is a shell LLC with no assets, the demand letter is still useful as a pre-litigation document, but the realistic settlement number is much lower and the cost of collecting on a judgment is much higher. That is a key input to the $125 written evaluation question.
Account stated as the secondary theory
Account stated is the theory that converts an ongoing billing relationship into a liquidated debt. The facts: the creditor sent invoices or monthly statements, the debtor received them, the debtor did not dispute the amounts within a reasonable time, and a reasonable person on the debtor's side would have understood that silence read as agreement. The theory matters because it sidesteps the breach-of-contract quality argument. The debtor's defense to account stated is to show a contemporaneous written dispute, not a post-litigation invented one. On a multi-invoice file, plead account stated as the secondary theory and the underlying breach as the primary. The demand letter should reference both.
What the B2B demand letter should do
- Identify the debtor entity precisely (legal name, state of formation, principal address) and any guarantor.
- Attach the contract or PO, the invoices, and the statement of account.
- State the balance owed in liquidated form with a per-diem interest calculation under RCW 19.52.010 (or contractual rate if one is written).
- Plead the two theories in plain language: breach of contract (primary) and account stated (secondary).
- Cite RCW 4.84.330 if the contract has a fee clause; cite the offer-of-settlement statute if the matter is $10,000 or less.
- Demand payment by a specific date, 15 business days from the letter, with payment instructions.
- State the next step if payment is not made: filing in the appropriate Washington court (district court below the jurisdictional limit, superior court above), naming the entity and (if applicable) the guarantor as defendants.
- Send certified mail with return receipt to the debtor entity's registered agent (verified via the Washington Secretary of State business search) and to any guarantor's address on the guaranty page, plus email to the contact of record.
Documents to upload before the letter goes out
- The master agreement, SOW, or accepted proposal with all amendments.
- Every purchase order, change order, or signed authorization.
- The invoices in the form sent, plus aging report or statement of account.
- Delivery record: timesheets, milestone signoffs, shipping records, project status reports.
- The personal guaranty, if any, including the signature page.
- All written communications from the debtor about the invoice or the work.
- The debtor's Washington Secretary of State entity record (or comparable state if foreign).
- A one-line ledger showing principal balance and partial payments with dates.
When this becomes worth hiring an attorney
- Principal at issue above roughly $5,000 (B2B disputes below that often settle with a stiff in-house letter; the $575 attorney letter starts paying off above that line).
- A guaranty, a fee clause, or both. Either one materially changes the recovery math.
- A debtor entity that is operating (not dissolved, not insolvent) and has assets a judgment can reach.
- A liquidated balance, with the invoice amount not disputed in writing before the letter.
- An arbitration clause, a venue clause, or a Washington choice-of-law clause that affects the forum and timeline analysis.
What I review when you send the file
I read the contract first to confirm the fee clause and locate the personal guaranty, then the invoice and delivery proof, then the account-stated picture (was every invoice received, did the debtor ever dispute in writing). I form an honest view of whether a $575 letter is the right move, whether a $1,200 demand letter plus draft complaint is the better posture (because B2B debtors take a complaint draft more seriously than a letter standing alone), or whether a written evaluation should come first.
Primary sources
- RCW 4.84.330: reciprocal attorney-fee statute.
- RCW 19.52.010: 12 percent default interest.
- RCW 19.16.250: collection-charge limits.
- RCW 4.16.040: six-year statute of limitations on a written contract.
This page is an educational resource. Sergei Tokmakov is a California attorney (CA Bar #279869) currently seeking admission to the Washington State Bar. Nothing on this page creates an attorney-client relationship, and nothing on this page is Washington legal advice for a specific matter.