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What is a Tolling Agreement? A Comprehensive Legal Overview
Definition & Meaning
A tolling agreement is a legal contract that allows parties involved in a dispute to pause the statute of limitations on their claims. This means that the time limit to file a lawsuit is temporarily suspended. The primary purpose of such an agreement is to give parties additional time to evaluate the merits of their claims and the extent of their damages without the pressure of immediate legal action. During this period, both parties agree to forgo any defenses based on the expiration of the statute of limitations.
Table of content
Legal Use & context
Tolling agreements are commonly used in various legal contexts, including civil litigation, personal injury claims, and contract disputes. They are particularly useful when parties need more time to negotiate a settlement or gather evidence before deciding whether to pursue formal legal action. Users can often manage these agreements themselves with the right legal templates, such as those offered by US Legal Forms, which are drafted by experienced attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(Hypothetical example) Two businesses are in a contract dispute. They enter into a tolling agreement to pause the statute of limitations while they negotiate a potential settlement. This allows them to explore options without the risk of one party filing a lawsuit before the negotiations conclude.
State-by-state differences
Examples of state differences (not exhaustive):
State
Details
California
Tolling agreements are recognized, but specific statutory requirements may apply.
New York
Requires written agreements and specific language to be enforceable.
Texas
Allows tolling agreements but has limitations on their duration.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Common misunderstandings
What to do if this term applies to you
If you find yourself in a situation where a tolling agreement may be necessary, consider the following steps:
Consult with a legal professional to understand your rights and obligations.
Use legal templates from US Legal Forms to draft a tolling agreement that meets your needs.
Ensure that all parties involved clearly understand and agree to the terms before signing.
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