As a business owner you might need to send a cease-and-desist letter to those who are breaching a contract or you might receive one yourself. However, what legal power does it have?
What is a cease and desist letter?
If you have received a cease and desist letter, another party has informed you that they believe your action(s) are interfering with one of their rights. The letter instructs you to cease performing the alleged violations and not resume them. Situations in which a cease-and-desist letter may be sent from one party may include:
One party to a contract breaching a term(s) of the valid contract (e.g. refusal to make payment, refusal to provide the contracted service, etc.).
Does a Cease-and-Desist Letter Hold Any Legal Power?
The simple answer to this question is, “no.” A cease-and-desist order is separate and distinct from a cease-and-desist letter. The primary difference between these two is that an order does hold legal power. A cease-and-desist letter, by itself, does not hold any legal power or officially start a legal proceeding (e.g. a lawsuit).
However, cease-and-desist letters have a reputation as a precursor to litigation; therefore, they should always be taken seriously. In the letter itself, the other party will usually identify itself, the behavior it wants you to cease, and the amount of time you will be given to respond. So, you can think of the content of a cease-and-desist letter as a quasi legal argument.
Should a Lawyer Get Involved with a Cease-and-Desist Letter?
Yes, even if an attorney acts as an advisor, it is a good idea to retain counsel to assist with sending or responding to a cease-and-desist letter. Sending a cease-and-desist letter, sometimes, can lead to prompt action by the recipient without you having to expend additional time/money. However, ignoring a cease-and-desist letter is a bad idea because it could entitle the other side to a greater amount of damages, and you may have to pay penalties.