Tolling
The pausing or suspension of a statute of limitations period, preventing the deadline from running for a defined time due to specific circumstances or by agreement.
While straightforward in theory, many businesses fail to actively track obligations tied to this concept - often resulting in missed deadlines, unintended renewals, penalties, or loss of contractual rights.
US Law · For business owners and foundersWhat is a Tolling?
Tolling is the legal suspension or pausing of a statute of limitations period. When tolling applies, the limitations clock stops running - typically due to circumstances like fraud, incapacity, or active concealment - or by agreement between the parties. Once the tolling period ends, the clock resumes from where it stopped.
Courts may apply equitable tolling when a plaintiff could not have reasonably discovered the cause of action earlier despite diligent efforts. Common examples include fraudulent concealment by the defendant, discovery of latent defects, or situations where the defendant's own actions prevented timely filing.
Parties engaged in settlement negotiations often enter contractual tolling agreements - bilateral contracts that freeze the statute of limitations for a negotiated period. This allows parties to explore resolution without the pressure of filing a lawsuit to preserve their rights.
In practice, many teams rely on a contract expiry tracking system to stay on top of dates and obligations tied to clauses like this.
Key Elements
Triggering Event
Tolling begins upon a specific event: discovery of fraud, entry into a tolling agreement, filing of a related action, or the occurrence of another recognized legal basis for tolling.Duration
The tolling period lasts until the condition ends (e.g., until the plaintiff discovered or should have discovered the claim, or until the tolling agreement expires).Resumption of Period
Once the tolling event ends, the limitations period resumes - the remaining time before the original deadline continues to run from where it stopped.Contractual Tolling
Parties can agree in writing to toll (extend) the limitations period. Such agreements must be clear about which claims are tolled, the duration, and what happens upon expiration.Real-World Example
A software company discovers that a vendor defrauded them, but the statute of limitations on the fraud claim expired two years earlier. The vendor had actively concealed the fraud through false accounting records.
The statute of limitations may be tolled under the fraudulent concealment doctrine. Because the vendor actively prevented the company from discovering the fraud, the limitations period was suspended until the company discovered (or should have discovered) the fraud with reasonable diligence. The clock started running only from the date of discovery.
This is why many businesses adopt automated deadline tracking to ensure no critical dates are missed before they pass.
Sample Clause Language
Tolling Agreement ClauseWatch Out For
Tolling Agreements Have Expiration Dates
A tolling agreement only freezes the clock for the agreed period. If negotiations fail and the agreement expires, you must act immediately or risk losing your claim forever.Tolling Is Claim-Specific
Tolling typically applies to specific claims, not all claims arising from a relationship. Carefully define which claims are covered in any tolling agreement.State Law Varies Significantly
The grounds for equitable tolling, and the limitations periods themselves, vary significantly by state and by claim type. Always confirm which jurisdiction's rules apply.Don't let tolling deadlines catch you off guard
Key dates tied to tollings - renewal windows, expiry cutoffs, notice periods - can easily slip through the cracks when tracked manually. Missing them triggers automatic extensions, penalties, or lost rights. ExpiryEdge tracks every critical deadline and sends automated reminders before they're due - so nothing slips.
Instead of relying on spreadsheets or manual follow-ups, a centralized renewal reminder system ensures every deadline is visible, tracked, and actioned automatically.
How to Use This in Your Favor
Use Tolling Agreements During Negotiations
When engaged in serious settlement discussions, enter a tolling agreement to preserve all legal options without the distraction and expense of simultaneously filing a lawsuit.Track All Tolling Periods Carefully
Calendar all deadlines under tolling agreements well in advance. Missing the expiration date of a tolling agreement can result in permanently time-barred claims.Related Terms
Frequently Asked Questions
Does filing a lawsuit toll the statute of limitations?
Filing a lawsuit stops the limitations clock for that claim. Some states also have "saving statutes" that give plaintiffs additional time to refile if a prior suit is dismissed on procedural grounds.
Can parties contractually shorten the limitations period?
Yes, in many jurisdictions. Contracts can shorten (or extend) statutes of limitations, provided the shortened period is reasonable and the provision is clearly disclosed.
What is the difference between tolling and a limitations waiver?
Tolling temporarily pauses the limitations clock. A limitations waiver permanently relinquishes the right to assert the time bar as a defense. Tolling is temporary; a waiver is permanent.