Rule 68.Offer of judgment

Rule 68 gives a party defending against a claim a way to cap its exposure to costs. More than 10 days before trial begins, the defending party may serve the adverse party an offer to allow judgment to be taken against it, for the money, property, or other terms specified in the offer, with costs then accrued. The adverse party has 10 days from service to accept, in writing; if it does, either party can file the offer, the notice of acceptance, and proof of service, and the Clerk enters judgment.

An offer that isn't accepted within that window is deemed withdrawn, and evidence of it isn't admissible except in a proceeding to determine costs. Making an offer that goes unaccepted doesn't stop a party from making another offer later. The cost consequence gives the rule its teeth: if the offeree ends up with a final judgment that isn't more favorable than the offer, the offeree has to pay the costs incurred after the offer was made.

Rule 68 also reaches cases where liability has already been determined -- by verdict, order, or judgment -- but the amount or extent of that liability still needs to be worked out. The party already adjudged liable can make an offer of judgment at that stage, and it carries the same effect as a pre-trial offer as long as it's served within a reasonable time, and not less than 10 days before hearings to determine the amount or extent of liability begin.