Federal Rule of Civil Procedure 68 lets a party defending against a claim offer to allow judgment on specified terms with accrued costs. An ordinary offer must be served at least fourteen days before the trial date. The recipient has fourteen days after service to serve written acceptance. An unaccepted offer is treated as withdrawn, but rejecting it can affect costs if the judgment the recipient ultimately obtains is not more favorable. [1]
Rules that determine the answer
The word “costs” needs legal analysis. Marek v. Chesny explains that when the underlying statute defines attorney’s fees as part of costs, Rule 68 can affect recovery of those fees. It does not follow that every rejected offer makes the plaintiff pay every dollar of the defendant’s attorney bill. The governing claim, fee statute, offer wording, accrued costs, and final judgment must be compared correctly. [2]
An unaccepted offer generally stays out of the merits trial and is admissible only in a proceeding to determine costs. A later offer is permitted. [1] Another important limit comes from Delta Air Lines v. August: Rule 68’s cost-shifting provision does not apply when judgment is entered entirely for the defendant, though other cost rules may still matter. [3] State offer-of-judgment laws can differ substantially, so do not import this federal rule’s deadline or consequences into a state case without checking its law.
What to do next
- Calendar the response deadline from valid service and check the actual document: an ordinary settlement proposal is not necessarily a Rule 68 offer.
- Identify the monetary amount, nonmonetary terms, claims resolved, and whether accrued costs or fees are included or additional.
- Evaluate the expected judgment and potentially recoverable post-offer costs with counsel, comparing like with like rather than looking only at the headline dollar amount.
- If accepting, serve written notice within the rule’s period; the offer, acceptance, and proof of service can then be filed for entry of judgment.
Practical example
A defendant offers a stated amount plus accrued recoverable costs. The plaintiff later wins a smaller judgment after the legally required comparison. Rule 68 may then make the plaintiff responsible for post-offer costs even though the plaintiff won on liability. If the offer includes accrued fees instead, the comparison must account for those terms rather than treating the two offers as identical.
For related situations, see Rule 408 settlement protections and federal witness fees and expenses.
Primary sources
- Federal Rule of Civil Procedure 68: offers, acceptance, and costs
- Marek v. Chesny, 473 US 1: attorney’s fees defined as costs
- Delta Air Lines v. August, 450 US 346: judgment entirely for defendant
Sources checked: October 31, 2026.