The Demand Letter Without Prejudice serves as a crucial pre-litigation tool in Hong Kong's legal framework, representing a formal attempt to resolve disputes before pursuing court action. It is typically used when there are outstanding payments, contractual breaches, or other commercial disputes where the demanding party wishes to maintain the possibility of amicable settlement. The 'Without Prejudice' designation, recognized under Hong Kong law, encourages open dialogue by preventing the letter's contents from being used as evidence in subsequent legal proceedings. This document should clearly state the claim amount, provide relevant background information, specify payment terms, and outline consequences of non-compliance while maintaining a tone that encourages settlement discussion. It's particularly effective in Hong Kong's business environment, where maintaining commercial relationships while pursuing debt recovery is often prioritized.

1. Letter Header: Including 'Without Prejudice' marking, date, sender's details, and recipient's details

2. Reference Line: Clear identification of the matter or contract in dispute

3. Debt/Claim Details: Precise statement of the amount owed or claim value, including calculation breakdown

4. Factual Background: Concise description of the circumstances leading to the claim

5. Legal Basis: Clear statement of the legal grounds for the claim

6. Payment Demand: Specific amount demanded and payment deadline

7. Payment Instructions: Clear banking or payment details for settlement

8. Consequences of Non-Payment: Statement of intended legal action if demand is not met

9. Settlement Invitation: Expression of willingness to discuss reasonable settlement proposals