Tuesday, August 03, 2010

Tolling Agreement (Litigation Checklist)

This tolling agreement checklist and list of best practices is part of my Colorado Litigation Checklist approach to litigation knowledge management and litigation strategy.  A tolling agreement is often used when the parties to a dispute are nearing the running of the statutory limitations period and want time to continue negotiations rather than force the filing of a lawsuit.
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Checklist:
- Identify all applicable statutes of limitation related to all applicable claims, and ensure the tolling agreement is fully executed before any limitation period runs.
- Set forth recitals as you would in a settlement agreement or other contract, focusing on the identity of the parties, the nature of their dispute, and the mutual promises that serve as consideration.
- Set forth:
 -- Term of the agreement, including method(s) for early termination, if any.
 -- State that the statute of limitations will not run during term, and that no legal or other enforcement action will be taken during the term of the agreement
 -- State that the agreement does not constitute an admission by either party
 -- Include standard contract clauses: execution in counterparts clause, a choice of law clause, and a merger and no oral modifications clause (see sample tolling agreement, below, for language).
- Execute the agreement, and retain fully executed copy for records (it is not necessary to file or record the agreement)
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Thoughts & Best Practices:
- Ask:  what is the purpose of the tolling agreement--is it just to delay needing to think about the case, or is there a specific objective in mind?  Consider shaping the settlement environment through the term and early termination provisions by, for example, terminating the agreement at a certain earlier date if the parties have not completed mediation with a mutually agreeable mediator by that date, etc.
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Example Forms:
- Click Here for Sample Tolling Agreement (Locked)
- Click Here for Publicly Editable Tolling Agreement (Please feel free to make improvements to this form, and comment below to describe what changes were made)
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Jeff Vail is a business litigation attorney in Denver, Colorado.  Visit www.vail-law.com for more information.
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This tolling agreement checklist and list of best practices is part of my Colorado Litigation Checklist approach to litigation knowledge management and litigation strategy.

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Lisa said...
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