In Chile, how do I send a formal demand letter to a contractor before suing for delays?

Yes, you can exert formal pressure without immediately going to court: send a certified letter through Correos de Chile (Chilean postal service), demanding compliance within a short and peremptory deadline or, failing that, a refund of the payment made, stating that you reserve all rights. In Chile, for bilateral contracts, you can demand specific performance or termination of the contract with compensation for damages due to breach, in accordance with Article 1489 of the Civil Code. If you are not satisfied with their response, you must file a civil lawsuit for breach of contract.