Tolling Agreement Legal Definition: What It Means and Its Importance
A tolling agreement is a legal contract that suspends the statute of limitations for a specified period of time, allowing parties to negotiate and resolve their disputes without the risk of the claim being time-barred. It is commonly used in complex commercial litigation cases where parties need more time to investigate and settle a dispute.
The purpose of a tolling agreement is to give parties more time to resolve their disputes without the need for litigation. The agreement typically outlines the terms under which the parties will negotiate and resolve their dispute, including the timeline and the scope of the negotiations. By suspending the statute of limitations, the parties can work towards a mutually agreeable resolution without the pressure of a looming deadline.
Tolling agreements are often used in cases where the claim is complex and requires a significant amount of investigation or when a party needs more time to gather evidence. These agreements can also be useful in situations where the parties are working towards a settlement and want to avoid the risks and expenses of litigation.
Tolling agreements can be particularly important in cases where a party’s legal rights may be at risk. By suspending the statute of limitations, the parties can work towards a resolution that protects their legal rights and interests without the risk of losing their claim due to a missed deadline.
In addition to suspending the statute of limitations, tolling agreements can also include provisions related to confidentiality, non-disclosure, and non-disparagement. These provisions can help ensure that the parties are able to negotiate in good faith and protect their reputations in the process.
Overall, tolling agreements can be an effective tool for parties to resolve their disputes outside of litigation. By giving parties more time to negotiate, they can work towards a mutually acceptable resolution without the pressure of a looming deadline. If you are involved in a complex commercial dispute or facing legal claims that require more time to resolve, it may be worth considering a tolling agreement as a potential solution.