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A demand letter is a formal document where one party requests another to take specific action, often written by an attorney. It usually demands that the recipient cease illegal activities or fulfill contractual obligations. For example, an attorney might send a letter to enforce a contract, asking a party to stop violating its terms, or to address infringement of intellectual property rights, such as copyright or trademark issues. The video, presented by attorney Aaron Hall, aims to inform viewers about the implications of receiving or sending a demand letter, emphasizing its purpose and common contexts.