Definition of a Tolling Agreement
- A tolling agreement begins when a party involved or soon to be involved in a lawsuit sends a letter to the opposing party. In most cases, it will be the plaintiff contacting the defendant. In this letter, the plaintiff will propose drafting a tolling agreement to waive the statute of limitations defense. Most often, this situation will arise when the parties are engaged in settlement negotiations and the final date to file is coming up.
- A tolling agreement's terms are negotiated through both parties and their lawyers. The terms of a typical tolling agreement are usually rather simple, but there will be specific items that need to be hammered out, including the date through which the agreement stands.
- Upon negotiating the terms of the agreement, the tolling agreement will be written up to include all the points agreed upon. Featured language in the agreement usually will include words to the effect of stating that neither party finds it advantageous to engage in litigation at the present time. It also may state reasoning that both parties wish to engage in further settlement negotiations without having the looming deadline hanging over their heads.
- Upon drafting the tolling agreement, both parties will need to sign and execute the agreement for it to become a binding document. The agreement does not need to be filed with any court, but the importance of the document may call for a notary public to witness the signatures.
- There are differences between a tolling agreement, which speaks to deadlines to file and statutes of limitation, and a jurisdictional filing, which is concerned with notices of appeal. Jurisdictional filings are only drafted after an initial judgment in a lawsuit, and the deadline for such a notice cannot be adjusted. Tolling agreements take place before the lawsuit has begun, usually in an attempt to avoid a court date entirely.