What does Rule 408 prohibit regarding offers to settle?

• A. Offers to settle or negotiate are admissible to prove liability.
• B. Offers to settle or negotiate are admissible to prove the amount of damages.
• C. Offers to settle or negotiate are not admissible to prove liability or the amount of damages, with limited exceptions.
• D. They are admissible to prove both liability and damages.

Answer: (C)

Rule 408 is about protecting settlement talks from being used as proof of fault or damages. Offers to settle or negotiations that happen to resolve a dispute are generally not admissible to show that a party is liable or to prove the amount of damages claimed. This rule exists to encourage people to settle without fear that their negotiations will become evidence of blame or a specific damages figure in court.

The reason this option is the best is that it captures both the broad rule and the idea of limited exceptions. In most situations, the settlement discussions themselves aren’t allowed to establish liability or the damages. The phrase “with limited exceptions” refers to cases where the evidence might be admitted for other purposes—things like proving a witness’s bias, prejudice, or some other non-liability-related purpose. So, the correct understanding is that offers to settle are generally not admissible for liability or damages, with narrowly defined exceptions for other evidentiary purposes.