This tolling agreement checklist and list of best practices is part of my Colorado Litigation Checklist approach to litigation knowledge management and litigation strategy. A tolling agreement is often used when the parties to a dispute are nearing the running of the statutory limitations period and want time to continue negotiations rather than force the filing of a lawsuit.
- Identify all applicable statutes of limitation related to all applicable claims, and ensure the tolling agreement is fully executed before any limitation period runs.
- Set forth recitals as you would in a settlement agreement or other contract, focusing on the identity of the parties, the nature of their dispute, and the mutual promises that serve as consideration.
- Set forth:
-- Term of the agreement, including method(s) for early termination, if any.
-- State that the statute of limitations will not run during term, and that no legal or other enforcement action will be taken during the term of the agreement
-- State that the agreement does not constitute an admission by either party
-- Include standard contract clauses: execution in counterparts clause, a choice of law clause, and a merger and no oral modifications clause (see sample tolling agreement, below, for language).
- Execute the agreement, and retain fully executed copy for records (it is not necessary to file or record the agreement)
Thoughts & Best Practices:
- Ask: what is the purpose of the tolling agreement--is it just to delay needing to think about the case, or is there a specific objective in mind? Consider shaping the settlement environment through the term and early termination provisions by, for example, terminating the agreement at a certain earlier date if the parties have not completed mediation with a mutually agreeable mediator by that date, etc.
- Click Here for Sample Tolling Agreement (Locked)
- Click Here for Publicly Editable Tolling Agreement (Please feel free to make improvements to this form, and comment below to describe what changes were made)
Jeff Vail is a business litigation attorney in Denver, Colorado. Visit www.vail-law.com for more information.
This tolling agreement checklist and list of best practices is part of my Colorado Litigation Checklist approach to litigation knowledge management and litigation strategy.