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Tolling Agreement Law

Tolling Agreement Law: A Comprehensive Guide

A tolling agreement is a legal agreement between two parties that suspends the statute of limitations for a specific period. Tolling agreements are a common way for parties to resolve disputes without having to go to court. The term “tolling” refers to the act of stopping or delaying the running of the statute of limitations.

Types of Tolling Agreements

There are three types of tolling agreements: mutual, unilateral, and conditional.

Mutual tolling agreements are agreements where both parties agree to suspend the statute of limitations. For example, if the parties are negotiating a settlement, they may agree to suspend the statute of limitations while the negotiations are ongoing.

Unilateral tolling agreements, on the other hand, are agreements where only one party agrees to suspend the statute of limitations. For example, if a plaintiff is unable to locate a defendant to serve them with a lawsuit, the plaintiff may agree to toll the statute of limitations for a specific period.

Conditional tolling agreements are agreements where the tolling is based on certain conditions being met. For example, if a defendant agrees to toll the statute of limitations in exchange for the plaintiff providing additional evidence, the tolling is conditional on the plaintiff providing that evidence.

Benefits of Tolling Agreements

Tolling agreements can be beneficial for several reasons. They can help parties avoid litigation, which can be time-consuming and expensive. They can also allow parties to continue negotiating a settlement without the pressure of an impending statute of limitations deadline.

Additionally, tolling agreements can help ensure that parties have sufficient time to investigate a claim or prepare a defense. By suspending the statute of limitations, parties can gather the necessary evidence and evaluate the merits of a claim or defense before taking any further action.

Potential Drawbacks of Tolling Agreements

While tolling agreements can be beneficial, they also have potential drawbacks. If the parties are unable to reach a settlement, the statute of limitations will resume running once the tolling period ends. This can lead to a rushed and potentially incomplete litigation process.

Furthermore, tolling agreements can be used to unfairly advantage one party over the other. For example, if a defendant agrees to toll the statute of limitations while continuing to engage in discovery, they could use the extra time to gain an unfair advantage over the plaintiff.

Conclusion

Tolling agreements can be an effective way for parties to resolve disputes without going to court. By suspending the statute of limitations, parties can continue negotiating a settlement or gathering evidence without the pressure of an impending deadline. However, tolling agreements can also have potential drawbacks, so it is important to carefully consider the terms of any tolling agreement before agreeing to it.

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