Legal Definition Of Tolling Agreement

The Tolling Agreement might be mistaken for a highway toll bridge where money is collected. But it also has another definition with regards to rights and contract law. Here is the legal definition of the Tolling Agreement.

“Asserting Rights after Statute of Limitations”

The Statute of Limitations (also Statute of Repose or Nonclaim Statute) allows for the court system to proceed in an orderly fashion. Collecting evidence, deposing witnesses and filing claims would be quite difficult if there were no time restraints on lawsuits. The Statute of Limitations sets a fixed time period for completing certain matters.

While the statute of limitations may be good in most cases, it may be wise to suspend the rules due to some unforeseen event. A contract can be written with something called a Tolling Agreement, which allows for pausing, delaying or suspending the time period that will automatically kick in. This provision extends rights past the normal statute of limitations time period. Parties who have agreed to tolling, waive any defense.

At times, an action cannot be adequately completed in due time; tolling allows parties and authorities more time to assess and determine the legitimacy and viability of claims. Common circumstances where tolling may be involved include underage juvenile status, insanity, bankruptcy, natural disaster or good-faith negotiations. In each of these cases, a “special condition” exists that could lead to a sensible extension of right beyond the time frame limits. Liability insurance and other agreements may be invalidated by tolling agreements.

“Sports Use Tolling Agreements”

Another place where tolling agreements are used quite often are sports. Most modern professional sports – basketball, baseball, football, hockey and soccer – have collective bargaining agreements, which carefully stipulate the rights of both players and owners based on strict fixed time frames.

In college, when an athlete transfers or is injured, he can apply for another year of eligibility. This is a form of tolling.

Another example is a minor league deal for baseball or hockey. Young athletes want a chance to make the major league team. Many contracts have time frames where the major league must make a decision after a certain period of time. If not, the athlete wants to try out with another team. A Tolling Agreement may suspend this time period due to injury.

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