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What Is a Tolling Agreement in Construction

A tolling agreement, also known as a tolling contract, is a kind of agreement that allows construction companies to extend the timeline for a particular project. Tolling agreements are typically used in situations where legal or regulatory issues may cause project delays.

In essence, a tolling agreement allows the construction company to continue working on a project while legal or regulatory issues are resolved. This can be particularly useful in situations where there is a risk of significant project delays, which could negatively impact the construction company`s bottom line.

Some of the key features of a tolling agreement in construction include:

• Extension of project timeline: A tolling agreement allows the construction company to continue working on a project beyond the original timeline, thereby giving them more time to complete the project.

• Cost allocation: The agreement outlines how the costs of the additional work will be allocated, ensuring that all parties involved are fairly compensated for their efforts.

• Defining key terms: The agreement will clearly define key terms such as the start and end dates of the agreement, the scope of the work involved, and the responsibilities of each party.

• Risk allocation: The agreement will also outline how risks associated with the project will be allocated between the parties involved.

Overall, tolling agreements are an effective tool for construction companies looking to mitigate the risks associated with legal or regulatory issues. By giving them more time to complete a project, these agreements can help construction companies avoid costly delays and keep their projects on track.