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A tolling agreement is a contract between two parties that pauses the statute of limitations, allowing for extended negotiations, often proposed by builders when discussing repair of construction defects. While it offers additional time to resolve disputes without filing a lawsuit, caution is necessary. The agreement only applies to the parties involved; if the builder goes out of business or other issues arise, other potentially liable parties—such as general contractors and subcontractors—are not bound by the tolling agreement. Consequently, the statute of limitations may expire during negotiations, limiting legal options against those other parties.
