In law, almost every action is required to be time bound. If anyone is aggrieved by the action of another, he must initiate legal action within a particular specified time against that action or he will lose the right to legal remedy. This limitation of time within which he must act or bring action against another or seek remedy is generally referred to as the statute of limitations in law.
The period of limitation for each kind of remedy is prescribed by statute itself. Sometimes, it is possible to stop the running limitation period by law itself or by agreement. This procedure of stopping the limitation temporarily is called tolling. It helps to pause limitation for a number of reasons such as minority or incapacity of the plaintiff, bankruptcy of defendant, absence of defendant, or initiation of negotiations outside the court process to find a consensus between parties.
It is common to mistake the term Tolling Agreement as an agreement for collection of tolls in a highway, but that is just misleading. Tolling Agreements are often found in contracts with sportspersons. It is an assertion of rights even after the statute of limitations has kicked in. The statute of limitations allows for orderly conduct of court proceedings to ensure that everything is completed in a timely manner. It sets a fixed time period for completing certain matters. And this is a good practice in most cases. But there may be unforeseen events which may have to be provided for. And for this reason contracts may provide that the pausing or delaying of the specified time periods will automatically kick in in certain circumstances. This agreement will override the statute of limitations and parties agreeing to this waive any right to defense based on limitation.
Often certain actions cannot be completed within specified time periods. To deny parties remedy in such situations may be a very harsh punishment. Tolling allows authorities and parties more time to assess the situation and determine the validity and legitimacy of claims. Common instances where tolling is allowed and observed are in the cases of juvenile offenders or insane or bankrupt persons. Natural disasters or Act of God situations also allow for tolling. There needs to exist special situations which justify tolling. In some cases, tolling can invalidate liability insurance claims.
Many sports agreements often contain tolling clauses. In these detailed agreements made between the players and the owners, a number of situations are provided where the time period can be stalled. In these collective bargaining agreements, there are a number of rights of owners and players stated in very strict time frames. The situations in which these time frames can be relaxed are also set out in a similar detailed manner. For example, injury or leave of absence to pursue a course of study is all usually permitted. Or else, the contract may specify that a particular league is to decide on a player within a certain time, which may be postponed on account of injury.
Tolling agreement eliminates ambiguity. It also allows both the parties to assess the situation and conduct proper negotiations.