Carr ran into and injured Pedersen, a pedestrian. With Carr in his car were Wanda and Walter Passenger. Passerby saw the accident and called the police department, which sent Sheriff to investigate. All of these people were available as potential witnesses in the case of Pedersen v. Carr. Pedersen alleges that Carr, while drunk, struck Pedersen, who was in a duly marked crosswalk.Pedersen's counsel wishes to prove that after the accident Carr went to Pedersen and offered $1,000 to settle Pedersen's claim. The trial judge should rule this evidence
admissible as an admission of a party. admissible as an admission to show Carr's liability, provided that the court gives a cautionary instruction that the statement should not be considered as bearing on the issue of damages.  inadmissible, since it is not relevant to either the question of liability or the question of damages.  inadmissible, because even though it is relevant and an admission, the policy of the law is to encourage settlement negotiations.