Reclamation Demand Letter Template for the United States

When you've delivered goods to a buyer who subsequently becomes insolvent or fails to pay, a Reclamation Demand Letter becomes your primary legal remedy for recovering those goods. This formal document allows you to reclaim possession of delivered merchandise under specific circumstances defined by the Uniform Commercial Code and federal bankruptcy law.

When do you need this document?

You need a Reclamation Demand Letter when your buyer becomes insolvent while still in possession of goods you delivered on credit. This situation commonly arises when customers file for bankruptcy, cease operations, or demonstrate clear inability to pay outstanding invoices. The letter is also necessary when you discover fraudulent misrepresentations about the buyer's financial condition that influenced your decision to extend credit. Time is critical in these scenarios-you must act within 10 days of delivery under normal circumstances, or 45 days if the buyer files for bankruptcy protection.

Key legal considerations

Your reclamation rights depend on meeting strict legal requirements under UCC Article 2-702. The goods must still be identifiable and in the buyer's possession when you make the demand. You cannot reclaim goods that have been sold to good faith purchasers or incorporated into other products. The demand must clearly identify the specific goods, provide evidence of delivery, and state your legal basis for reclamation. Additionally, you must demonstrate that the buyer was insolvent when receiving the goods or made misrepresentations about their financial condition. If the buyer has filed for bankruptcy, Section 546(c) of the Bankruptcy Code provides additional protections but requires compliance with different timing and notice requirements.

Legal requirements in United States

Under the Uniform Commercial Code, your reclamation demand must be in writing and delivered to the buyer within the applicable time limits. The document must include complete identification of the goods, proof of delivery dates, and clear statement of the buyer's insolvency or payment default. You must also provide reasonable proof that the buyer was insolvent when receiving the goods or made material misrepresentations. In bankruptcy proceedings, you must comply with federal court procedures and may need to file additional motions with the bankruptcy court. State variations of the UCC may impose additional requirements, such as specific notice procedures or documentation standards. Some jurisdictions require concurrent compliance with the Fair Debt Collection Practices Act when the demand relates to consumer transactions.