In reversing a lower court, the Colorado Court of Appeals ruled that a trial judge is not necessarily obligated to enforce a settlement agreement as written and may instead apply common-law contract principles to alter, modify or decline to enforce it.

Under Colorado law, a plaintiff who makes a written offer of settlement more than 14 days before trial that is rejected by the defendant is entitled to recover his actual costs incurred after making the offer, so long as he recovers a final judgment greater than the amount offered. The same goes for a defendant’s post-offer actual costs, according to the appellate court’s opinion filed on Thursday.