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A cease-and-desist letter is a formal notice instructing someone to stop their illegal activities, such as trademark or copyright infringement, harassment, or defamation. It serves to inform the recipient that you are aware of their unlawful actions, eliminating any claims of ignorance. It's appropriate to use in situations involving violations of trade secret laws or misuse of confidential information. Common mistakes include failing to provide clear details about the illegal activity or the specific actions required to comply. It's crucial to send the letter if the situation continues after informal communication. Aaron Hall, a business attorney in Minneapolis, addresses these concepts in the tutorial.