A limitation extension agreement, also known as a statute of limitations agreement or tolling agreement, is a legal agreement between two parties that extends the time limit for filing a legal claim or lawsuit. The agreement is used to protect the statute of limitations from expiration while the parties continue to negotiate a settlement or pursue alternative dispute resolution.
The statute of limitations is a legal deadline for filing a claim or lawsuit, after which the claim is barred. Each state has its own statute of limitations for different types of claims, ranging from personal injury and breach of contract to property damage and defamation. Once the statute of limitations has expired, the claimant loses the right to pursue legal action against the defendant.
A limitation extension agreement allows the parties to agree to extend the statute of limitations for a specific period of time, during which they can continue to negotiate a settlement or explore alternative dispute resolution options, such as mediation or arbitration. This can be particularly beneficial when the parties are close to reaching a settlement, but need additional time to finalize the details.
The terms of a limitation extension agreement typically include the specific claims or causes of action being tolled, the duration of the tolling period, and any conditions or limitations on the extension. The agreement may also include provisions for the payment of expenses related to the tolling period, such as legal fees and costs.
It is important to note that a limitation extension agreement does not waive or extend the statute of limitations indefinitely. Instead, it provides a temporary extension of the deadline, after which the original statute of limitations will resume. Therefore, it is essential to negotiate and finalize any settlement or dispute resolution within the agreed-upon time frame.
In conclusion, a limitation extension agreement can be a useful tool for parties involved in a legal dispute who need more time to negotiate a settlement or pursue alternative dispute resolution options. However, it is important to consult with a qualified attorney before entering into such an agreement to ensure that your interests are protected and that the agreement is legally enforceable.