A tolling agreement is a document which outlines the terms and conditions between two parties dismissing the statute of limitations which restricts the time in which a company may file a civil suit against another company. The US legal system allows for a certain amount of time after which an individual, a company or any institution can no longer frame a civil suit against an offender. However, in some cases, more time is required by both parties to frame their cases, and this is where a tolling agreement becomes important. Certain points which need to be kept in mind while framing tolling agreements are as follows:
- Under the laws of the United States, usually the plaintiff requests the defendant for the joint framing of a tolling agreement, this happens when two companies are involved, or are on the verge of being embroiled in a civil suit which requires time to arrange.
- The most important aspect of a tolling agreement, which is otherwise an uncomplicated document, is the date or the duration till which the tolling agreement is valid. This needs to be framed carefully as once the duration of a tolling agreement is over, formulation of more tolling agreements to waive the effectiveness of the statute of limitations may not be acceptable in a court of law.
- A tolling agreement must be clearly written and absolutely transparent in order to be truly effective and valuable. It must be written in conjunction with the laws of the United States, and it should preferable be written by professionals well versed in the technical aspects of writing such documents. Care should be taken by both parties that entering into a tolling agreement will not affect their liability insurance.
- A tolling agreement must also be free of errors. The negotiations engaged with must be clearly specified and the wording of the tolling agreement must more or less express the fact that neither party, the claimant or the accountant, wish to engage in litigation at the moment, or with the threat of the expiry of the stature of limitation in front of them.
- The tolling agreement may not be filed before the court, but in case of a breach of contract it assumes legal significance. Since it is an important document, it is often signed before a public notary. It has to be signed by suitable representatives of both parties in order to be rendered effective.