Tolling Agreement Template: How to Write One

Every legal claim has a clock running against it. The statute of limitations sets a hard deadline to file a lawsuit, and once it passes, the claim is dead no matter how strong it was. That deadline creates a problem: sometimes two parties are close to settling, but the clock is about to run out, and the only way to protect the claim is to file suit, which usually blows up the negotiation.

A tolling agreement solves that. It is a short contract in which both sides agree to stop the clock for a defined period so they can keep talking without anyone losing their rights. This guide explains what a tolling agreement is, when to use one, the clauses it needs, and the drafting mistakes that quietly destroy the protection people think they have.

What Is a Tolling Agreement?

A tolling agreement is a written contract that pauses, or "tolls," the running of the statute of limitations on one or more claims. During the tolling period, the time that passes does not count toward the filing deadline. When the agreement ends, the clock picks up where it left off.

It does not waive the claim, settle it, or admit anything. It buys time. A party that was facing a deadline in three weeks can sign a 90-day tolling agreement and walk into negotiations with breathing room, knowing the right to sue is preserved if the talks fail.

Tolling agreements show up most often in:

• Commercial and contract disputes, where the parties want to investigate the facts before committing to litigation
• Construction defect claims, which involve long inspection and expert-review timelines
• Employment disputes, where an employer and a former employee are negotiating a severance or release
• Insurance and coverage disputes, where the carrier and insured need time to assess a claim
• Professional malpractice claims, where the underlying matter is still being resolved

The common thread is that both sides see value in talking rather than racing to the courthouse, and neither wants the calendar to make that decision for them.

Why the Statute of Limitations Matters

The statute of limitations is a deadline set by state law. It varies by the type of claim and the state: breach of a written contract might be four to six years, a personal injury claim two to three years, and some claims as short as one year. Once it runs, the defendant can ask the court to dismiss the case, and the court usually will, without ever looking at the merits.

That is what makes tolling valuable. A claimant who is mid-negotiation as the deadline approaches has only bad options without a tolling agreement: file a lawsuit and disrupt the talks, or let the deadline pass and forfeit the claim. Tolling removes the false choice. It also signals good faith, because each side is agreeing to keep the dispute out of court while they work toward a resolution.

Tolling Agreement vs. Related Documents

People confuse tolling agreements with a few neighboring contracts. The distinctions matter because they do different jobs.

Tolling vs. Standstill

A standstill agreement is broader. It bars the parties from taking legal action during a set period, not just from letting the clock run. Many real-world agreements are hybrids: the parties promise not to sue and agree the limitations period is tolled. If you want both protection from a missed deadline and a guarantee that nobody files suit mid-negotiation, say so explicitly.

Tolling vs. Settlement

A tolling agreement is not a settlement agreement. Tolling preserves a claim; a settlement resolves it. Tolling is the runway, and a settlement is the landing. The two often appear in sequence: parties sign a tolling agreement, negotiate, and then sign a settlement if they reach terms.

Tolling vs. Waiver

A waiver gives up a right. A tolling agreement does the opposite: it protects a right by pausing the deadline. Be careful with the wording, because sloppy drafting can turn what was meant to be a pause into something a court reads as a permanent waiver of the limitations defense, which is not what most defendants intend.

Key Clauses in a Tolling Agreement

A tolling agreement is short, but each clause carries weight. Vague drafting is the main reason these agreements fail.

1. Identification of the Parties

Name the parties in full, using legal entity names and states of incorporation for businesses. If a claim might involve affiliates, subsidiaries, officers, or insurers, decide whether they are covered and name them. A tolling agreement between two companies does not automatically toll claims against an individual executive unless it says so.

2. The Claims Being Tolled

This is the most important clause. Describe the claims with enough specificity that there is no later fight about scope. Reference the underlying facts (for example, "all claims arising from the September 2025 supply contract between the parties") rather than listing legal theories, which can be incomplete. If you only want to toll certain claims, say which ones, and state clearly that all other claims are unaffected.

3. The Tolling Period

Define exactly when tolling starts and ends. Use specific dates or a fixed number of days from signing. State whether the period can be extended and how (usually by written agreement signed by both sides). The clearer the start and end, the easier it is to calculate the deadline later.

4. Effect on the Limitations Period

Spell out the mechanics: the statute of limitations is suspended during the tolling period and resumes when it ends, with the time elapsed during tolling not counted. Add language confirming that neither party will argue the agreement itself revived a claim that was already time-barred when they signed. Tolling protects claims that are still alive; it cannot resurrect dead ones.

5. No Admission of Liability

Include a clear statement that the agreement is not an admission of fault, liability, or the validity of any claim or defense. Both sides want this. It lets parties negotiate freely without worrying that signing the tolling agreement will be used against them.

6. Preservation of Defenses

Confirm that, apart from the limitations defense being paused, all other defenses, rights, and arguments remain intact. The defendant is pausing one clock, not surrendering the case.

7. Termination

State how the agreement ends: automatically on the end date, or earlier if either party gives written notice. A short tail period after notice (commonly 30 days) gives the other side time to file suit before the clock fully restarts. Without a termination clause, you are locked in for the full term.

8. Confidentiality

Many parties want the negotiations, and the existence of the dispute, kept private. A confidentiality clause, or a standalone non-disclosure agreement, keeps the discussions out of public view and protects sensitive information exchanged while the parties evaluate the claim.

9. Governing Law and Signatures

Specify which state's law governs, since limitations rules differ by state. Both parties must sign, and for businesses the signatory needs authority to bind the company.

How to Write a Tolling Agreement: Step by Step

Step 1: Confirm the claim is still alive. Calculate the current limitations deadline before you draft anything. Tolling only works on a claim that has not yet expired. If the deadline is days away, move quickly.

Step 2: Identify every party that needs to be covered. Include affiliates, individuals, and insurers if their potential liability is part of the dispute. Leaving one out can mean the clock keeps running against that party.

Step 3: Describe the claims by their facts. Tie the tolled claims to the underlying events so there is no ambiguity. Decide whether you are tolling all claims or a defined subset, and say so.

Step 4: Set a realistic period. Pick a window that gives the parties time to investigate and negotiate without dragging on. Build in an extension mechanism for the cases that need it.

Step 5: Add the protective language. No admission of liability, preservation of all other defenses, and a clause stating the agreement does not revive expired claims. These three protect the party agreeing to toll.

Step 6: Define termination. Decide whether either side can end it early, and give a short notice tail so nobody is caught off guard when the clock restarts.

Step 7: Pick governing law and sign. Match the governing law to the dispute, confirm signing authority, and date the agreement so the tolling period is easy to calculate.

Common Mistakes That Void Tolling Protection

Tolling a claim that is already barred. A tolling agreement signed after the deadline has passed does nothing. Always calculate the limitations period first.

Describing the claims too narrowly. If the agreement tolls "breach of contract claims" but the real dispute also involves fraud, the fraud claim's clock keeps running. Tie scope to the facts, not a single legal label.

Leaving the period open-ended. "Until the parties resolve their dispute" is not a date. Open-ended tolling creates uncertainty and can be hard to enforce. Use a fixed term with a defined extension process.

Forgetting affiliated parties. Tolling between two companies does not protect a claim against an individual officer or a parent entity unless they are named. Map out everyone who could be sued.

No termination tail. If either party can terminate immediately with no notice period, the other side may have no time to file before the deadline returns. A 30-day tail prevents that ambush.

Reusing a generic template without checking state law. Limitations periods and the enforceability of tolling vary by state. A few jurisdictions limit how long parties can contract around statutes of limitations, so the governing-law choice is not just boilerplate.

When to Use a Tolling Agreement

• A settlement is close but the deadline is not. You need a few more weeks to finalize terms without filing suit.
• The facts are still developing. A construction defect or product issue needs expert inspection before anyone can value the claim.
• You want to avoid the cost and publicity of a lawsuit. Tolling keeps the dispute private while the parties try to resolve it.
• Multiple claims are at different stages. You can toll the ones that are ripening while you litigate or resolve others. If the situation calls for restructuring the underlying contract instead, a novation agreement may be the better tool.
• You are weighing arbitration over court. If the dispute may head to arbitration, tolling buys time to set that up; pair it with a clear arbitration agreement so the forum is settled before any claim is filed.

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Generate Your Tolling Agreement with Contractable

A tolling agreement is short, but the wording decides whether your claim survives. Get the scope, the period, and the protective clauses right and you keep every option open; get them wrong and you can lose a claim you thought was safe. Contractable generates a tailored tolling agreement in seconds, with the right scope, term, and termination language for your dispute, so you can pause the clock and negotiate with confidence.