Tolling Agreement
(Statute of Limitations) (AL)

Summary

This template tolling agreement can be used to toll a statute of limitations applicable to existing claims in an Alabama civil action. This template includes practical guidance, drafting notes, and an alternate clause. The purpose of a tolling agreement is to suspend the period of time in which parties must legally bring a lawsuit. A tolling agreement extends the filing deadline and allows parties to negotiate and possibly resolve their dispute without litigation. Under Alabama's discovery rule, the statute of limitations for a cause of action may not commence until an objectively reasonable party would or should have known facts that give rise to the cause of action. See Aliant Bank v. Four Star Invs., Inc., 2017 Ala. LEXIS 75, at *50 (Aug. 25, 2017). For actions based upon written contracts not under seal, upon verbal contracts, and for the recovery of money upon a loan and for an account stated, the statute of limitations is six years, with the cause of action accruing when the breach occurs. Ala. Code § 6-2-34; City of Guin v. Booth, 295 So. 3d 647, 658 (Ala. 2019). For actions based upon contracts for sale: four years, also with the cause of action accruing when the breach occurs. Ala. Code § 7-2-725(1). For actions based upon sealed instruments, the statute of limitations is 10 years, the cause of action accruing when the breach is or should have been discovered. Ala. Code § 6-2-33(1); Donaldson v. Williams, 222 So. 2d 725, 726 (Ala. 1969). For more information on statute of limitations in Alabama, see Statutes of Limitations (AL). If you need to toll a statute of repose rather than a statute of limitations, see Tolling Agreement (Statute of Repose) (AL).