Compromise agreement

A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.[1] Like any other contract, a compromise agreement must be consistent with the requisites and principles of contracts. While it is true that the agreement is binding between the parties and becomes the law between them, it is also a rule that to be valid, a compromise agreement must not be contrary to law, morals, good customs, and public policy.[2]

[1] Civil Code of the Philippines, Article 2028.

[2] Wenphil Corporation v. Abing, G.R. No. 207983, April 7, 2014.