Put simply, a demand letter states the legal basis for why you are entitled to certain rights and why the other side should comply with your demand. For instance, a demand letter could alert an opposing party that they have acted in violation of a contract and that you are now demanding payment.
While it is not mandatory in Virginia that you send a demand letter before filing a lawsuit, there are benefits to doing so. Demand letters show the other party that you are serious and may lead to a settlement before a lawsuit needs to be initiated. A demand letter can also serves as evidence of your willingness to try to settle the matter outside of court