Tolling Agreements

Tolling agreements suspend the statute of limitations. Sometimes in talking with a party about settlement, you start getting close to the limitation deadline. If those talks are ongoing, it may be in the interest of the parties to stop the statute of limitations from running. Stopping the statute of limitations means that it is tolled. In other words tolling agreements confirm that.

Basics of Tolling Agreements

The basic elements of a tolling agreement are:

• The parties to the agreement need to be precisely identified. Therefore the plaintiff needs to be identified by name and address. All of the defendants who are a party to the Agreement need to be identified. If those defendants are individuals, they need to be identified by name and address. If they are entities, then they need to be identified by their complete entity name and their place of business. That way there is no confusion as to who is entering into the agreement. Therefore anyone who is not identified in the agreement is not bound by the agreement.
• The event needs to be identified whether it be a breach of contract, auto accident or something else. It should be identified by date, parties involved, subject matter and location is applicable.
• The effective date of the Agreement needs to be stated. That is the date from which the statute of limitations is tolled.
• The tolling period needs to be stated. This is the number of days for which the statute of limitations is tolled i.e. does not run.
• The substance of the agreement is that whatever the statute of limitations is it is tolled for the number of days that constitute the tolling period. Nothing more is agreed to.
• In addition there probably should be a paragraph that indicates that by signing the Tolling Agreement, the parties are not making any admissions. They are not modifying any other agreements. In addition no one is giving up any other defenses or rights they may have other than what is expressly stated herein. They are not acquiring any rights other than what is expressly stated herein. Also they are not reviving any claim that is already barred by the statute of limitations.

The basic form of Tolling Agreements may be as follows:

Tolling Agreement

This Agreement is entered into between ________________ (hereafter referred to as “the plaintiff”) whose address is stated below and ________________ (hereafter referred to as “the defendant”) whose address is stated below. The plaintiff and the defendant together are collectively referred to as “the parties”.

WHEREAS the parties wish to try to resolve all disputes (the claim) arising out of a particular event occurring on or about the ______day of ________________ at _____________________________________________ involving the parties (the event).

WHEREAS the parties do not wish to have a lawsuit filed at this time in order to pursue the possibility of resolving the dispute/claim.

In consideration of the recitals set forth above and the terms set forth below and the parties acknowledging the receipt of other good and valuable consideration, they do agree to the following:

1. The sole purpose and effect of this Agreement is to stop the statute of limitations from running for the number of days constituting the tolling period as to the event/claim and to allow the parties to conduct settlement discussions during the tolling period to resolve the dispute/claim. This Agreement does not in any way affect any other right, defense or claim that any party may have.
2. The effective date of this Agreement is ___________________________.
3. The tolling period is ninety (90) days beginning with the effective date. All that means is that any statute of limitations that may apply to the claim or event does not run for the tolling period.
4. The tolling period may be extended by all defendants through counsel giving notice to the plaintiff’s counsel of such. That notice shall be given by both fax and by email to the plaintiff’s attorney and at the email and fax number set forth below.
5. Nothing in this Agreement in any way changes whatever statute of limitations may apply herein.
6. This Agreement shall not be mentioned or offered into evidence in any litigation that may be undertaken between the parties. By signing this Agreement, the parties are not making any admissions as to anything, they are not modifying any other agreements, they are not modifying or giving up any other rights,defenses or claims they may have and they are not acquiring any rights other than what is expressly stated in this Agreement. Any claim that is otherwise time barred is still time barred in spite of anything in this Agreement.
7. This is the entire Agreement of the parties. This Agreement shall be interpreted in accordance with Virginia law.

Counsel for Plaintiff: __________________________________________

Counsel for Defendant ______________________________________________

Call, or contact us for a free consult. Also for more info on this issue see the Wikipedia pages. Also see the post on this site dealing with injury issues.