How do I reply to a letter of demand in Malaysia if I don't owe the money?

How do I reply to a letter of demand in Malaysia if I don't owe the money? The short answer

To dispute a letter of demand in Malaysia, reply in writing: say you do not owe the sum, or which part, give your reason, ask for the documents, and reserve your rights. Under sections 17 and 21 of the Evidence Act 1950, anything you write that suggests you owe the money can be used against you in court, so admit nothing you dispute.

No law makes you reply, but a written denial sent early helps you if the sender sues. Send it to the sender only, and do not mark it "without prejudice" (words for a settlement offer; see below). Lawyers call this an "open" letter: a judge may read it later. It does not mean a public post. In Peninsular Malaysia a signed admission or any part payment restarts the 6-year time limit (Limitation Act 1953, sections 26(2) and 27), so pay nothing you dispute. If you owe part, see "I owe only part of the amount" below.

A letter of demand is also called an LOD, a lawyer's letter, a surat tuntutan or notis tuntutan in Malay, and 律师信 in Chinese. This guide is for a genuine dispute. If you do owe the money, Day 4 of your first 7 days after a letter of demand explains how to pay. A reply never stops a court paper or a notice with a legal deadline; see the papers list below. Not sure which paper you hold? The free Lawyer's Letter Check names it and the date that matters.

What should my reply to a letter of demand say? A sample reply

A careful reply has five parts. They are the sender's reference and date, a clear statement that you do not owe the sum, your main reason, a request for the documents, and a line that reserves your rights. It is safe in one sense only: it admits nothing. It does not stop the sender from suing. It fits on one page and states only facts you are sure of. Send it to the law firm that sent the letter and quote its reference; a reply to the lawyer counts as a reply to their client.

Sample reply to a letter of demand you dispute (contoh surat balas LOD). Change the words to fit your facts. A simple denial that a receipt or a bank record proves can usually be sent without a lawyer. Take advice first if the debt is old or the letter is for your company. If the letter is not from a law firm, write "you" where the sample says "your client". If nothing was signed, the sender must still prove the deal; see a claim with no written agreement.

Start with your name and address, the date, the law firm's name and address, and "Your ref: [reference]". Add a "Re:" line that names the sender's claim, then "Dear Sir or Madam". End with "Yours faithfully", your signature and your name. In between go these five lines:

• "I refer to your letter dated [date], reference [reference], which I received on [date]."
• "I deny that I owe your client RM[amount], or any part of it."
• "My reason is [one or two facts, with dates]. I attach [the receipts, bank transfer slips or other proof]."
• "Please send me the agreement, the invoices and the statement of account your client relies on, and show how the amount is calculated."
• "I may have other reasons. All my rights are reserved."

Your reason must say why you do not owe the money ("I paid on [date]"; "the goods were never delivered"), not why you have not paid it. For rent or a bill you already paid: "I paid the rent for every month from [month year] to [month year] by bank transfer. I attach the transfer slips and your client's WhatsApp message of [date] that confirms the last payment." Check every month against your bank record before you write "every month". The last line means that you have not given up any reason or claim you did not list.

If the letter also claims a fee for the letter itself, you may add: "I do not accept the RM[amount] claimed as legal fees for your letter." Before you add "I have not agreed in writing to pay it", read the legal-fee FAQ below and who pays for a lawyer's letter of demand.

Sign and date the letter. No printer? Print it at a shop, sign it, and scan it with your phone. Send it by email to the address on the firm's letterhead, and by registered post with an A.R. card (a card the receiver signs). Keep the sent email, the posting slip and a copy. A court may presume that an ordinary posted letter arrived, but it need not (Evidence Act 1950, section 114). The stronger presumption applies only where a written law allows or requires service by post (Interpretation Acts 1948 and 1967, section 12). Do not reply inside a WhatsApp chat.

What should I never write in a reply to a letter of demand?

In Malaysia, never write anything that admits a debt you dispute, promises to pay, apologises for not paying, or threatens the sender. An admission is any statement, spoken or written, that suggests you owe the money (Evidence Act 1950, section 17); very little is enough. The court reads the whole letter by its tone and language, so a line such as "nothing in this letter is an admission" does not undo a sentence that admits the debt.

These phrases are risky:

• "I will pay when I can" or "I will sort it out soon": this admits the debt and, in Peninsular Malaysia, can restart the time limit. In 2014 the Federal Court held that the text message "sorting soon not 2 wory" acknowledged a debt.
• "I owe you RM[amount], but ...": this admits a debt of that amount, restarts its time limit in Peninsular Malaysia, and may be read as admitting the whole claim. If you accept part, see "I owe only part of the amount" below.
• "Please give me more time to pay": this admits the debt and leaves only the way of paying in dispute. In 1992 the Supreme Court gave judgment without a trial on letters like this.
• "Please reduce or waive the amount; we are in financial difficulty": the Federal Court (Tenaga Nasional Bhd v Kamarstone Sdn Bhd, 2013) read a letter like this as acknowledging the whole debt.
• "We are ready to pay once your client accepts ...", "Sorry for the trouble" or "I hope we can settle this amicably": keep these for the separate "without prejudice" letter (next section). Be polite, but in the denial do not offer, promise to pay, apologise about the money or talk about settling.
• "I have stopped paying my debts" or "I am going to stop paying my creditors": such a notice to a creditor can be an act of bankruptcy (Insolvency Act 1967, section 3(1)(g)).
• "Without prejudice" at the top of your denial: this asks the court not to read the one letter you want it to read.
• "Withdraw this or I will expose you on Facebook": a threat to a person's reputation can be criminal intimidation (Penal Code, section 503). An insult or an accusation of fraud carries its own risk, and a judge may read it.
• Your signature on the sender's own form that "confirms" the balance: that is a signed written acknowledgement (Limitation Act 1953, section 27(1)).

Should I mark my reply "without prejudice"?

Not on your denial. Courts have held that the words "without prejudice" (tanpa prejudis in Malay, 无损权益 in Chinese) protect a genuine attempt to settle a real dispute. An offer made under them normally cannot be shown to a Malaysian court as proof that you owe the money (Evidence Act 1950, section 23). Your denial is different: you want the judge to see it, so send it as an open letter.

To offer a sum to end the matter, write a second, separate letter headed "Without prejudice", and say that you make the offer without admitting any liability. In 1981 the Federal Court held that such letters cannot be given in evidence of the negotiations, but if they lead to a settlement they can prove its terms.

The words alone do not protect every letter. Courts in England, and some Malaysian High Courts, have held that they do not protect a letter that only admits the debt and asks for time, or a letter that threatens. On an old debt, take advice before you send any offer, even a without-prejudice one. No Malaysian appellate court has decided whether such a letter can restart the time limit.

An outline of the second letter, under the heading "WITHOUT PREJUDICE":

• "I deny your client's claim for the reasons in my open letter of [date]. Without admitting any liability, I offer RM[amount] in full and final settlement of all claims arising from [the matter]. This offer is open until [date]. This offer is subject to a written settlement agreement signed by both sides. If your client accepts, please confirm in writing."

I owe only part of the amount. How do I reply without admitting the rest?

In Malaysia you have two routes; choose one before you write. Route one: pay the part you accept now, openly, and name what it is for. The sender can still sue for the rest: paying part ends the claim only if the sender agrees (Contracts Act 1950, section 64). Agreement can come from conduct, but simply receiving the money, or keeping it without a word, is not enough. If you want the matter closed, ask the sender to confirm in writing that it accepts the payment "in full settlement of the claim". Route two, to end the whole claim: do not pay first. Offer the figure in a separate "without prejudice" letter (see above), and pay only after both sides sign the agreed terms.

Admit a figure only if you will pay it now. A written admission lets the sender, once it sues, ask the court for judgment on that figure without a full trial (Rules of Court 2012, Order 27 rule 3). If the claim is one bond or one invoice, admitting or paying part can also admit that you are liable at all, leaving only the amount to argue. On route one, do not just say the figure is wrong: say plainly that you do not owe the rest.

On route one, these sentences replace part 2 of the five-part reply above; keep the other four parts:

• "I accept that RM[amount] is unpaid under [the invoice, or the agreement and clause], and I have paid it today. I deny that I owe the rest of the RM[amount] claimed."
• "I do not agree with the RM[amount] claimed for [interest, late charges or legal fees], because [one short reason]. I deny that I owe it. Please show how it is calculated."
• "I have transferred RM[amount] today in payment of [the invoice, or the agreement and clause] only. This payment is not an admission of the balance."

On route two, part 2 of your open letter reads: "I deny that I owe your client the RM[amount] claimed." Put any figure you would pay only in the separate "without prejudice" letter.

Even on a recent debt, a payment or a signed line that admits part of the debt starts a fresh time limit for that debt. The words "not an admission" do not stop that. Pay only to the account the sender or its law firm names in writing, put the reference in the transfer note, and keep the slip. For interest, late charges or a legal fee, see the FAQ below.

If the debt is old (next section), take advice before you pay or admit any part. In Peninsular Malaysia any payment towards a debt restarts the 6 years for that debt. If the claim covers several invoices, it restarts them for the invoice it pays. No Malaysian court has decided whether a payment limited to the undisputed part is treated differently.

Can my reply restart the time limit on an old debt?

Yes, if it admits the debt. In Peninsular Malaysia a creditor has 6 years to sue on most debts (Limitation Act 1953, section 6(1)(a)). If you acknowledge the claim, or make any payment on it, the 6 years run again from that day (section 26(2)). An acknowledgement (an admission that the debt exists) must be in writing and signed by you; one made to the sender's law firm counts as made to the sender (section 27). A court judgment has 12 years, and so does the principal of a loan secured by a charge on land (sections 6(3) and 21(1)). So let a lawyer check the dates before you call a claim out of time.

In this guide a debt is "old" if the money fell due more than 4 years ago (2 years in Sabah and Sarawak). It is also old if you are not sure when it fell due. That is this guide's safety margin, not a rule of law. Sabah and Sarawak have their own Limitation Ordinances; see the FAQ below.

In 1978 the Federal Court defined an acknowledgement: a clear admission of a debt that exists now, in a sum that is stated or can be worked out. Saying you owe the money is one, even if you add that you will never pay. So "I received your letter" and "I deny the claim" are safe; "I owe it but I cannot pay" is not. In Peninsular Malaysia the 6 years can start again even after they have run out. The Federal Court has applied this to a signed admission, and a High Court said so expressly in 2018. No higher court has yet decided the point after full argument.

If the debt is old, the safest reply is one line, sent after you take advice: "I do not admit that I owe your client any sum. Nothing in this letter acknowledges any debt." That last sentence is safe here because the letter admits nothing else. Add no reasons, offers, apology or payment. If a lawyer confirms the dates, your reply can add: "Any claim is also out of time, and I will rely on the Limitation Act 1953." The time limit is a defence you must raise in court yourself (section 4).

What if the letter is about a deposit, defective work, a training bond, a debt collector or an online post?

In Malaysia the reply is the same five parts; only the reason changes. If the sender owes you money from the same deal, say so as a set-off (a closely connected claim that reduces theirs), without admitting their claim. Write it as "in any event": "In any event, your client owes me RM[amount] for [the deposit or the defects] under the same [contract]. I will set it off against any sum your client claims, and I reserve my right to claim it." Your own claim has its own time limit; see the FAQ below.

The usual reason, one for each kind of dispute:

• A tenancy deposit. List each deduction the landlord claims and why you dispute it, and state the deposit the landlord still holds. For rent the landlord says is unpaid, use the paid-rent sentence above.
• Defective or unfinished work, or goods that arrived damaged, short or late. List the defects, with dates and photos. Say the work or goods were not delivered as agreed and you do not owe the sum claimed. Then, in any event, claim the cost of putting the defects right and set it off, as above. Never write "your invoice" or "the balance".
• A training bond. Check the bond's repayment clause, and ask for the signed bond and proof of the real cost of the training. If you accept part, choose a route under "I owe only part of the amount" above. Name a figure in your open letter only if you pay it now (route one). Otherwise put it only in a separate "without prejudice" letter (route two).
• A debt collector. Ask who owns the debt now, and for the paper that proves it. That is the written notice of the assignment (the transfer of the debt), or the creditor's letter that authorises the collector. Pay only the owner those papers show.
• A letter that says you defamed someone in a post or review. Keep a copy of the post with its date and link. You may take it down: that is not, by itself, an admission, and it does not give up your defences. Do not repeat the accusation in your reply. An apology can be used as an admission (Evidence Act 1950, section 17), so get advice before you apologise or sign the sender's apology.

Which papers cannot wait for an ordinary reply?

A reply letter does not stop the clock on a writ, a Form 198 small claim, a section 466 notice, a bankruptcy notice or a construction Payment Claim. Each has a deadline fixed by law, counted from the day it is served or received. Act within the days the law gives. A court paper names a court and carries a case number and a court seal; a law firm's letter does not.

• A writ of summons: 14 days after service to enter an appearance, the court form that says you will defend (Rules of Court 2012, Order 12 rule 4).
• Form 198, the small claims summons: file your defence, and any counterclaim (your own claim against the sender), in Form 199 within 14 days after service (Order 93 rule 6).
• A section 466 notice to a company, for a debt of more than RM50,000: 21 days from the day it is left at the registered office (Companies Act 2016, section 466(1)(a)). There is no set form: dispute it in writing within the 21 days, and see a lawyer (next section).
• A bankruptcy notice: 7 days after service to pay, or to file an affidavit (a sworn written statement) (Insolvency Act 1967, section 3(1)(i); Insolvency Rules 2017, rules 92 and 93). It can issue only after a final judgment against you, so a letter alone cannot start it.
• The affidavit can raise only a counterclaim, set-off or cross demand that equals or exceeds the judgment debt and that you could not have raised in the earlier case. A bankruptcy petition needs a debt of RM100,000 or more (section 5(1)(a)). The Budget 2027 announcement to raise this to RM150,000 from 2027 was not law as at 25 October 2026; check before you rely on either figure.
• A Payment Claim under the Construction Industry Payment and Adjudication Act 2012: serve a written Payment Response within 10 working days, stating the amount you dispute and why (section 6). The claim must say that it is made under that Act (section 5(2)); an ordinary invoice or lawyer's letter is not one.
• A letter that is also a notice under your agreement or under a statute. Examples: a loan default notice, a tenancy notice to remedy, a hire-purchase repossession notice (at least 21 days) and a Form 16D on charged land (at least one month). Check what happens when its days end; our guide on what happens if you ignore a letter of demand lists them.

My company received a letter of demand in Malaysia. What changes?

In Malaysia a company's debt is the company's own, because a company is a separate legal person (Companies Act 2016, section 20). The usual exception is a personal guarantee signed by a director, often inside a supplier's credit application form; check what you signed. Next, find out whether the paper is a section 466 notice. It usually names section 466, gives 21 days and warns of winding up (closing the company and selling what it owns to pay creditors). It is left at the registered office (the official address filed with SSM, often the company secretary's office). If you are not sure, treat it as one: count 21 days and see a lawyer in the first days, because a court order to stop a winding-up petition may be needed. Ask your company secretary today whether anything arrived there, and on what date. The 21 days run from that day, not from the day you read it.

Within the 21 days, put the company's dispute in writing to the creditor, with the facts and dates, and attach the evidence from the time (delivery orders, photos, complaints, the seller's replies). A bare "we dispute it" may not be enough. Courts have held that a winding-up petition can be restrained (stopped by a court order) when the debt is genuinely disputed on substantial grounds. Consider paying any part the company does not dispute; if that part is itself more than RM50,000, the notice can still take effect for it. Take advice before the company admits or pays anything.

For a company, part 2 of the sample reads: "[Company] Sdn Bhd (Registration No. [number]) denies that it owes your client RM[amount], or any part of it." Sign off "For and on behalf of [Company] Sdn Bhd, [name], Director"; the FAQ below says who signs and what to keep current with SSM.

Do I have to reply to a letter of demand I dispute?

No law in Malaysia makes you reply, but a short written denial sent early helps you if the sender sues. The Court of Appeal has said a failure to reply is not an admission, but it is conduct a court may weigh, and in a business dispute silence can count against you. If the sender sues, it can ask for summary judgment (judgment without a trial) if you show no real defence. In 1992 the Supreme Court, by a majority, held (Bank Negara Malaysia v Mohd Ismail) that a judge must reject a denial that is vague or imprecise. The same goes for one that clashes with undisputed documents written at the time. The Court of Appeal has called a defence that first appears in court, and clashes with those documents, "an afterthought". A denial does not prove your story; its value is that it shows you raised the dispute at the time. Our guide explains what happens if you ignore a letter of demand.

What happens after I send my reply?

The sender may answer quickly, or not for weeks; no law fixes what it does next. Its silence does not end the claim or stop the time limit running.

Keep every paper in one folder: the letter, your reply, the proof of sending and every document and message. Screenshot messages so that the date and the sender's number show, and do not delete the chat. If the sender writes again, repeat your position in one or two calm lines and add no new admissions. Either side may propose mediation in writing; it is voluntary (Mediation Act 2012, section 5).

If a writ or a Form 198 arrives, see a lawyer in the first few days; its deadline runs from the day it is served. In a small claim lawyers cannot represent the parties, so you file the defence yourself; you can still get advice on what to write. Our guide explains what a defendant can do in a small claim. Your reply becomes the base of your defence; keep the two consistent. Our debt recovery guide shows how a debt claim moves from a letter to court and enforcement, from the creditor's side.

Key facts: disputing a letter of demand in Malaysia

• No law requires you to reply to an ordinary letter of demand, but in a business dispute silence can count against you. Its 7 or 14 days are the sender's own timetable: no legal deadline, unless the letter is also a notice under your agreement or under a statute.
• A section 466 notice to a company, for a debt of more than RM50,000: 21 days from the day it is left at the registered office (Companies Act 2016, section 466(1)(a)).
• A bankruptcy notice needs a final judgment first and gives 7 days after service (Insolvency Act 1967, section 3(1)(i)), so a letter alone cannot start it. A bankruptcy petition needs a debt of RM100,000 or more (section 5(1)(a)).
• An open letter (one not marked "without prejudice") is evidence of anything you admit in it (Evidence Act 1950, sections 17 and 21).
• Section 23 of the Evidence Act 1950 keeps out an admission made on condition that it is not used in evidence. Courts treat this as cover for a genuine offer to settle, so use the words only on an offer, never on your denial.
• Most debt claims in Peninsular Malaysia have a 6-year time limit (Limitation Act 1953, section 6(1)(a)).
• A part payment, or a signed written acknowledgement, restarts the 6 years in Peninsular Malaysia (sections 26(2) and 27).
• In Sabah and Sarawak many debts have a 3-year limit. A payment or acknowledgement restarts time there only if made before the limit ends (Limitation Ordinances, Sabah Cap. 72 and Sarawak Cap. 49, sections 19 and 20).

Do I need a lawyer to reply to a letter of demand?

Not for a simple denial that a receipt or a bank record proves. Get advice first when the sum is large for you, the debt is old, or you are not sure which part you owe. Get it too when the letter is addressed to your company or is about something you posted. What you tell your own lawyer stays private (Evidence Act 1950, sections 126 and 129). Our guide explains how to find a lawyer in Malaysia.

This article is general information about Malaysian law as at 25 October 2026, mainly for Peninsular Malaysia. Where Sabah and Sarawak differ, it says so only for the points it covers. It is not legal advice on your situation, and reading it does not make you a client of the firm. Day counts and amounts change, so check the current law before you rely on a figure.