Does a tolling agreement mean I'm admitting fault?

No. Standard tolling agreements include explicit non-admission language.

How long does a tolling agreement typically last?

Most run 90 days to 12 months, with 6 months being the most common.

Can either party end it early?

Most allow termination with written notice — typically 30 days. After termination, the statute of limitations resumes with the same time remaining.

What happens if it expires without resolution?

The statute of limitations resumes exactly where it left off. You're in the exact same position, minus the negotiation time spent.

Contract Glossary

Tolling Agreement

Definition

A tolling agreement pauses the statute of limitations clock on a potential legal claim. Instead of rushing to file a lawsuit before time runs out, both parties agree to freeze the deadline so they can negotiate a resolution.

In Practice

A software company discovers their vendor delivered a defective product 18 months ago. The statute of limitations is 4 years. Rather than spending $50,000 on litigation, they propose a 6-month tolling agreement to negotiate a fix, replacement, or refund.

Example Clause

The Parties agree that from the Effective Date through the Tolling Expiration Date, the running of any applicable statute of limitations shall be suspended and tolled. Upon expiration, the limitation period shall resume with the same time remaining as existed on the Effective Date.

Common in these contract types

Service Agreement Consulting Agreement Freelance Contract Partnership Agreement Licensing Agreement

Related contract clauses

Indemnification Clause Force Majeure Clause Limitation of Liability Clause

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Frequently asked questions about tolling agreement

Both sides benefit. The potential plaintiff gets more time to evaluate and negotiate. The potential defendant avoids premature litigation costs. It signals good faith.

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This content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.