Extending the Limitation Period by Agreement: What You Need to Know
The limitation period is the time frame within which a claimant can bring a legal proceeding against a defendant. Once the limitation period expires, the claim is considered time-barred, and the claimant loses the right to sue the defendant. However, in certain circumstances, parties may extend the limitation period by agreement.
Extending the limitation period by agreement is a common practice in many commercial contracts. Businesses use this tool to provide flexibility in case a dispute arises and to avoid rushing into litigation before having a chance to resolve the dispute through negotiation or other means.
In order to extend the limitation period by agreement, the parties must have a clear understanding of what they are agreeing to, and they must document their agreement in writing. The written agreement should be clear and unambiguous, setting out the period of extension, the reasons for the extension, and the terms and conditions of the agreement.
It is important to note that not all claims can be extended by agreement. For example, certain claims for personal injury or wrongful death may have strict statutory limitations that cannot be waived or extended by agreement.
When considering an extension of the limitation period, it is important to consult with legal counsel to ensure that the agreement is enforceable and will not be invalidated by any applicable laws or regulations.
In general, courts will uphold extensions of the limitation period by agreement as long as the agreement is clear, unambiguous, and not contrary to public policy. However, courts may be less willing to enforce agreements that are overly broad or that unfairly limit the rights of one party.
In conclusion, extending the limitation period by agreement can be a useful tool for businesses looking to provide flexibility in case of a dispute. However, it is important to consult with legal counsel and to carefully document the agreement to ensure that it is enforceable and does not run afoul of any applicable laws or regulations.