What Is a Tolling Agreement?

In a tolling agreement, an expiration of the statute of limitations is waved; thus litigation is not automatically dismissed due to the expiration. It allows parties additional time to determine the legitimacy of their claims.

According to US Legal, a tolling agreement is often used so that a party may avoid having to file an action while taking additional time to assess the viability of its claims as well as the amount of damages. When a tolling agreement is drawn up, parties waive the right to use the statute of limitations as a method of defense. Tolling agreements are intended to only affect the statute of limitations, not to provide an admission of wrongdoing.