An offer of judgment, pursuant to Federal Rule of Civil Procedure 68, is used to encourage settlements and protect parties willing to settle early in the litigation process. It is an extremely useful tool as it allows the defendant to make a pre-trial offer of judgment on specified terms, saving both parties the costs involved with extended litigation. There are, however, important nuances to using this strategy successfully.

The foundation of this tool comes from Rule 68(a) of the F.R.C.P., which reads:

At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued. If, within 14 days after being served, the opposing party serves written notice accepting the offer, either party may then file the offer and notice of acceptance, plus proof of service. The clerk must then enter judgment.