- Ontario’s basic limitation period runs generally two years from discovery (as of mid-2026 — verify the current rule before relying on it), with an ultimate outer limit further down the road.
- The parties identify the specific claim and the deadline that is approaching.
- - [ ] It is in writing and signed by both parties, or their lawyers, before the original deadline passes - [ ] It clearly identifies the specific claim or dispute it covers - [ ] It…
Negotiating a settlement while a limitation deadline ticks down puts both sides in an awkward spot: the creditor doesn’t want to lose the right to sue by waiting too long, and the debtor doesn’t want a lawsuit filed the moment talks get complicated. A standstill agreement — a private agreement between the parties to pause the limitation clock while they negotiate — is one way Ontario litigants sometimes manage that tension without either side having to blink first.
Standstill agreements are a practical tool, not an automatic protection. Whether one actually shields you depends heavily on how it is drafted, and whether the type of claim involved can legally be paused this way at all.
This guide explains what a standstill agreement is meant to do, why parties use them, and why they are risky to rely on without a lawyer reviewing the wording first.
Why Parties Use Standstill Agreements
Ontario’s basic limitation period runs generally two years from discovery (as of mid-2026 — verify the current rule before relying on it), with an ultimate outer limit further down the road. Once that basic period is close to expiring, a party who has not yet sued normally has to choose: sue now to protect the claim, or risk losing the right to sue at all.
A standstill agreement offers a third option. Both sides agree in writing that neither will rely on the passage of time during a defined negotiation window, so the party who would otherwise need to sue can hold off without giving up their position.
How a Standstill Agreement Works in Practice
- The parties identify the specific claim and the deadline that is approaching.
- They agree in writing on a start date and an end date, or a clear condition, for the standstill period.
- Both sides confirm they will not raise the limitation period as a defence for any time that falls within the agreed standstill window if a claim is later started.
- Negotiations proceed. If they fail, the party who held off can still sue, generally treating the standstill period as if it did not count against them.
What Makes a Standstill Agreement Actually Work
- [ ] It is in writing and signed by both parties, or their lawyers, before the original deadline passes
- [ ] It clearly identifies the specific claim or dispute it covers
- [ ] It states clear start and end dates, or an unambiguous way to determine when it ends
- [ ] It is entered into with legal advice on whether this type of claim can be paused this way at all
- [ ] Neither side is treating it as a substitute for tracking the real underlying deadline
Where Standstill Agreements Get Risky
Not every limitation period can simply be paused by private agreement, and Ontario law sets technical rules about which ones can be varied this way and how. A standstill agreement that is poorly worded, signed too late, or used for a type of claim it cannot legally affect may do nothing at all — leaving a party who thought they were protected to discover, only after the real deadline has passed, that they were not.
There is also the ultimate limitation period sitting in the background. A standstill agreement addressing the basic period does not automatically extend that outer limit, and relying on one without checking where you stand against both is a common and expensive mistake.
A Standstill Agreement Is Not a Substitute for Advice
Because the stakes of getting this wrong are total — a claim that becomes permanently unenforceable — a standstill agreement should be drafted or at least reviewed by a lawyer before either side relies on it, not adapted from a template found online. If you are close to a deadline and considering one, treat "get it reviewed" as the very next step, not an optional extra. If you just want a quick, low-cost read on your situation before committing to anything formal, our Ask a Lawyer service is a reasonable place to start.
Frequently asked questions
Can I just email the other side saying we’ll "pause the clock" instead of a formal agreement?
An informal exchange might be argued to form an agreement, but vague wording is exactly what gets disputed later, often after it is too late to fix. A proper standstill agreement should be a clear, specific, signed document, not a casual email thread.
Does a standstill agreement stop the limitation period completely, or just for one side?
It depends entirely on how it is worded. A well-drafted agreement usually protects the party who would otherwise need to sue, but the specific scope — what claims, what time period, and what happens if talks break down — is defined entirely by the agreement’s own terms.
What happens if we can’t agree on whether the standstill period has ended?
That is one of the biggest risks of an ambiguous agreement. If the end date or triggering condition is unclear, the parties can end up disputing exactly the deadline the agreement was supposed to make certain, which is why clear drafting matters so much.
Is a standstill agreement better than just filing a claim to protect my position?
Filing a claim is generally the more certain way to protect your legal position, since it does not depend on the other side’s cooperation or a court later agreeing the agreement was valid. Many parties use a standstill agreement specifically to avoid the cost of filing while negotiations look promising, but it carries more risk than simply suing in time.
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