A compromise agreement is one of the most practical legal tools in Philippine law. It is used to end disputes, prevent lawsuits, settle pending cases, avoid prolonged litigation, and reduce uncertainty between parties who would rather negotiate a solution than wait for a court judgment. In the Philippine setting, compromise is governed principally by the Civil Code, and it also interacts with procedural law, labor law, family law, criminal law, contract law, and evidence rules.

At its core, a compromise is simple: the parties make reciprocal concessions in order to avoid litigation or put an end to one already started. But legally, a compromise agreement is much more than a handshake settlement. It can extinguish claims, bar future litigation, become the basis of execution, and in many situations acquire the force of a final judgment once judicially approved.

This article explains the basics and deeper legal consequences of compromise agreements under Philippine law, with emphasis on the Civil Code context.

1. What is a compromise under Philippine law?

Under the Civil Code, a compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.

That definition contains the essential features:

there is a dispute, uncertainty, or potential conflict,
the parties choose settlement rather than full contest,
each side gives up something,
the goal is either to prevent a case or to end one.

A compromise may be made:

before a case is filed,
during trial,
on appeal,
or even at a stage where the parties are already enforcing or resisting enforcement of claims, provided the subject remains legally compromisable.

A compromise agreement is therefore both:

a contract, and
in the right setting, a procedural instrument with powerful effects in court.

2. Why compromise agreements matter

In Philippine practice, compromise agreements are common because they serve many purposes:

they save time and litigation costs,
they reduce legal risk,
they preserve business or family relationships,
they allow flexible solutions that a court might not craft on its own,
they promote peace rather than adversarial escalation,
they provide immediate clarity on obligations,
they may avoid the evidentiary difficulties of trial.

The law generally favors compromises because they help end disputes and unclog courts. Settlement is treated as socially useful. That favorable policy, however, does not mean every compromise is automatically valid. Like any contract, it must meet legal requirements.

3. A compromise is still a contract

Because compromise is a contract, the general rules on contracts apply. This means a valid compromise generally requires:

consent of the parties,
a definite object or subject matter,
a cause or lawful consideration,
parties with legal capacity,
a lawful and possible undertaking,
absence of vices of consent,
and compliance with any form required by law for enforceability or convenience.

This matters because many settlement disputes later arise from ordinary contract defects:

one party claims there was no real consent,
the terms were vague,
the person who signed lacked authority,
the agreement was procured by fraud or intimidation,
the terms were unlawful,
the supposed compromise covered rights that cannot legally be compromised.

So even though the law encourages settlement, the agreement must still stand on solid contractual ground.

4. The key element: reciprocal concessions

Not every acknowledgment of debt or simple promise to pay is automatically a compromise. A true compromise usually involves mutual concessions.

Examples:

a creditor agrees to accept lower payment or installment terms,
a debtor waives defenses and agrees to a fixed payment date,
parties in a property dispute agree to divide possession differently from their original claims,
siblings in an estate dispute agree to a distribution to avoid contesting the will,
business partners release claims against each other in exchange for a final accounting and payout.

The concessions do not need to be mathematically equal. The law does not require perfect balance. What matters is that the parties are settling uncertainty or dispute through negotiated give-and-take.

5. Compromise versus admission of liability

A compromise agreement is often misunderstood as a complete admission that one party was legally wrong. That is not always true.

A person may enter into a compromise:

to avoid the expense of litigation,
to remove uncertainty,
to preserve reputation,
to maintain relationships,
to secure immediate closure.

So the existence of a compromise does not necessarily mean a party is confessing full legal fault. It means the party is accepting a settlement arrangement to resolve the matter.

That said, once the compromise is validly executed, the party becomes bound by its terms regardless of earlier motives.

6. Kinds of compromise agreements

In Philippine practice, compromise agreements can appear in many forms:

A. Extrajudicial compromise

This is a settlement made outside court, usually before or even without filing a case.

Examples:

settlement of unpaid debt,
land boundary settlement,
settlement between neighbors,
business account reconciliation,
succession or partition settlement among heirs, subject to other applicable rules.

B. Judicial compromise

This is a settlement submitted to a court in a pending case for approval.

Once approved, it often becomes a judgment upon compromise.

C. Quasi-judicial or administrative compromise

Settlement may also occur before agencies, commissions, or tribunals, subject to their governing rules.

The legal effects vary depending on where and how the compromise is made.

7. What can be compromised?

As a general rule, rights that are patrimonial in nature or that parties may freely dispose of can often be the subject of compromise.

These commonly include:

debts and monetary claims,
damages,
contractual disputes,
property disputes,
business claims,
possession issues,
boundary disputes,
inheritance sharing disputes among persons who can legally settle,
civil liabilities arising from certain acts,
collection cases,
lease disputes,
payment schedules and restructuring obligations.

The broad principle is that compromise is allowed where the subject is something the parties may lawfully bargain over.

8. What cannot be compromised?

This is one of the most important parts of compromise law.

Not all matters may be compromised. The Civil Code limits compromise in certain areas, especially where public policy, status, law, or morality is involved.

As a rule, compromise is not allowed on matters such as:

civil status of persons,
validity of a marriage or legal separation,
grounds for legal separation,
future support,
jurisdiction of courts,
future legitime.

These limitations exist because some rights are not treated as ordinary private property. They are governed by public policy or protective legal rules. Parties cannot simply contract around them.

A. Civil status

A person cannot settle by agreement whether another is legitimately married, single, legitimate, illegitimate, or otherwise fixed in civil status in a way contrary to law.

B. Marriage and legal separation

Parties cannot validate or invalidate a marriage by compromise. Nor can they privately settle the legal grounds in a way that substitutes for the legal process where the law requires court action.

C. Future support

Support that is not yet due is specially protected. Parties cannot freely waive future support when the law considers it necessary for protection.

D. Jurisdiction

The parties cannot, by compromise, confer subject matter jurisdiction where the law does not, nor nullify jurisdiction fixed by law.

E. Future legitime

A future heir’s legitime cannot be bargained away in advance in the manner prohibited by law.

These prohibited subjects often cause invalidity, either fully or as to the unlawful portions.

9. Compromise in criminal matters

This area is often misunderstood.

A compromise agreement does not generally erase public criminal liability where the offense is one the State prosecutes in the public interest. Crimes are not merely private disputes.

However, compromise may still have effects in certain ways:

it may settle the civil liability arising from the offense,
it may influence the complainant’s attitude,
it may affect whether some complaint-driven cases continue in practice depending on the offense and governing rules,
it may be relevant in offenses or violations where the law itself allows settlement,
it may mitigate practical conflict even if it does not extinguish criminal liability.

The crucial distinction is:

criminal liability belongs to the public order and the State,
civil liability may often be settled, subject to law.

So a compromise over a bouncing check, fraud-related damage, or physical injuries-related expenses does not automatically mean the criminal case disappears. The answer depends on the nature of the offense and applicable special laws and procedural rules.

10. Compromise under the Civil Code versus novation

A compromise agreement sometimes resembles a restructuring or replacement of obligations, but it is not identical to novation.

Novation

Novation extinguishes an old obligation and replaces it with a new one, under specific legal requirements.

Compromise

Compromise focuses on settling a dispute or uncertainty through concessions.

A compromise may include novatory features, such as:

new payment terms,
replacement obligations,
revised schedules,
substituted performance.

But not every compromise is technically a novation, and not every novation is a compromise.

The difference matters in litigation because the legal theory, remedies, and proof may vary.

11. Compromise versus waiver and quitclaim

A compromise is also different from a mere waiver or quitclaim.

Waiver

A waiver is the intentional relinquishment of a known right.

Quitclaim

A quitclaim is commonly a release of claims, often in exchange for payment or settlement.

Compromise

A compromise usually involves mutual settlement of a dispute, not merely one-sided abandonment.

In practice, however, documents often combine these elements. A settlement agreement may contain:

compromise terms,
waiver clauses,
release provisions,
quitclaim language,
confidentiality undertakings,
non-disparagement clauses.

The legal classification depends on substance, not title alone.

12. Form of a compromise agreement

As a general rule, a compromise agreement does not require any mystical wording. There is no single mandatory title. It may be called:

compromise agreement,
amicable settlement,
settlement agreement,
memorandum of agreement,
release and quitclaim,
deed of settlement,
covenant to settle,
payment and release agreement.

What matters is the content.

Still, for clarity and enforceability, a well-drafted compromise should be written, even if not always strictly required in all cases. A written document reduces later disputes about:

what was agreed,
whether concessions were reciprocal,
deadlines,
default consequences,
scope of claims released,
authority of signatories.

Where the subject matter involves property, succession, rights requiring written proof, or court submission, written form becomes even more important.

13. Essential parts of a compromise agreement

A strong compromise agreement usually includes:

complete identification of the parties,
recital of the dispute or claim,
acknowledgment that the parties wish to settle,
precise obligations of each side,
payment terms if money is involved,
deadlines,
delivery or transfer obligations,
releases and waivers,
treatment of interest, penalties, or attorney’s fees,
consequences of default,
whether prior pleadings or claims are withdrawn,
confidentiality if agreed,
governing venue or implementation clauses where proper,
signatures and witness or notarization details where useful.

Poor drafting is a major source of post-settlement litigation.

14. Is notarization required?

Not always.

A compromise agreement may be valid even without notarization if all essential elements are present. However, notarization is often highly advisable because it helps with:

evidentiary weight,
proof of due execution,
authenticity,
ease of enforcement,
recordability where relevant,
reduced denial by signatories.

For some transactions involving real property or registrable rights, notarization may become especially important in practice.

But notarization does not cure an otherwise unlawful or defective compromise. It strengthens form, not substantive legality.

15. Authority to sign

A compromise may be attacked if the signatory lacked authority.

This issue commonly arises when a party is:

a corporation,
a partnership,
an estate,
a minor,
represented by an attorney-in-fact,
represented by counsel,
represented by an officer or manager whose authority is later questioned.

Important rules in practice include:

an agent must have sufficient authority,
a corporate representative must act within proper authority,
counsel does not always have unlimited power to compromise without the client’s authority,
guardians and representatives may be subject to special restrictions,
settlements affecting minors, incompetents, or estates may require greater scrutiny.

A compromise signed by a person without authority may be void, voidable, unenforceable, or vulnerable to challenge depending on the circumstances.

16. Consent must be real and free

Like other contracts, a compromise may be annulled or challenged if consent was vitiated by:

mistake,
violence,
intimidation,
undue influence,
fraud.

This is particularly relevant in settlement settings because the pressure to resolve a dispute can be intense. One side may later claim:

they were tricked about the legal consequences,
they were misled about the amount due,
they signed because of threats,
they did not understand the language,
the document was switched,
material facts were hidden.

Not every regret is a legal defect. The law does not rescue a party simply because the bargain later feels unfavorable. But where consent is truly defective, the compromise can be attacked.

17. Fraud, mistake, and discovery of falsity

A compromise is meant to settle uncertainty. Therefore, ordinary error about legal strength does not automatically invalidate it. Parties often compromise precisely because they are unsure who would win.

Still, a compromise may be vulnerable if it was based on:

fraud,
forged documents,
fabricated claims,
fundamental factual mistake,
concealment of decisive facts,
forged title or identity,
non-existent authority.

The law does not reward settlement procured by deception.

18. Effect of compromise: force of law between the parties

A valid compromise has the force of law between the parties. This is one of its strongest consequences.

That means:

the parties must comply in good faith,
the agreement binds them as any other enforceable contract,
they cannot simply return to their original positions because they changed their minds,
the compromise displaces the unsettled dispute with a concrete contractual settlement.

This principle gives compromise its stability. Courts generally respect settlements rather than allow parties to endlessly reopen the conflict.

19. Effect of compromise: res judicata and finality

A lawful compromise can have the effect of res judicata, especially when embodied in a judicial approval or judgment upon compromise.

In practical terms, this means:

the same dispute generally cannot be relitigated,
parties are barred from reopening settled matters,
the settlement becomes final as to what it covered.

This is one reason parties must read settlement terms carefully. A broad release clause can extinguish more claims than one party realized.

Res judicata is especially powerful in judicial compromises because once the court approves the agreement and renders judgment based on it, the case is effectively terminated according to the settlement.

20. Judgment upon compromise

When the parties submit a compromise agreement in a pending case and the court approves it, the result is often called a judgment upon compromise.

This has major legal consequences:

it is not merely a private contract anymore,
it becomes a judicial determination based on party agreement,
it is immediately binding according to its terms,
it may be enforceable by execution,
it generally has the effect of a final judgment.

A judgment upon compromise is special because it rests on party autonomy but carries judicial force.

21. Can a judgment upon compromise be appealed?

As a rule, a judgment upon compromise is not appealable in the ordinary sense because it is based on the parties’ own agreement rather than a contested adjudication by the court.

The rationale is straightforward:

a party should not ordinarily appeal from what that same party agreed to.

However, it may still be attacked on recognized grounds such as:

lack of consent,
fraud,
mistake,
lack of authority,
nullity,
illegality,
absence of jurisdiction.

So while ordinary appeal is generally not the route, extraordinary challenge may still be possible where the compromise is fundamentally defective.

22. Judicial compromise versus mere settlement talks

Settlement negotiations alone do not necessarily create a binding compromise.

There is a legal difference between:

ongoing negotiation,
preliminary offers,
draft terms,
verbal proposals,
unsigned term sheets,
and a final binding agreement.

The key question is whether the parties already had meeting of minds on definite terms.

Statements like these may not yet amount to a final compromise:

“We are open to settling.”
“We can consider installments.”
“Subject to management approval.”
“Draft only.”
“For discussion purposes only.”

In contrast, once the essential terms are agreed and finalized, compromise may arise even if one party later regrets it.

23. Default under a compromise agreement

A common issue is what happens when one party breaches the settlement.

For example:

the debtor misses an installment,
the seller fails to transfer title,
a party violates the release or confidentiality clause,
the agreed dismissal of claims is not carried out,
checks issued under compromise bounce.

The answer depends heavily on the wording of the agreement.

Possible effects include:

the injured party may sue for specific performance,
the injured party may seek rescission if legally available and justified,
the injured party may enforce the compromise as written,
a judicial compromise may be executed directly,
acceleration clauses may make the full balance immediately due,
prior waived claims may or may not revive depending on express stipulation and applicable law.

Careful drafting is crucial here. Many disputes arise because the agreement says what to pay, but not what happens if payment stops.

24. Can the original claim revive after breach?

Not always automatically.

This is a frequent misunderstanding. If the parties settled an original claim through compromise, the original dispute is generally replaced by the settlement framework. Whether the old claim revives after breach depends on:

the wording of the compromise,
whether the compromise is viewed as extinguishing or superseding the original obligation,
whether there is an express clause allowing revival,
whether law permits rescission or cancellation under the circumstances,
whether the compromise was judicially approved.

Some agreements expressly provide:

upon default, the full original claim revives,
payments already made are forfeited,
the non-defaulting party may seek execution on the unpaid balance,
the compromise remains effective but the debtor loses installment privilege.

Without careful language, revival issues become contentious.

25. Compromise on appeal or after judgment

Parties may still settle even after a judgment has been rendered, depending on the posture of the case and what exactly remains in dispute. Litigation does not eliminate party autonomy to compromise matters that remain legally compromisable.

Settlement after judgment may affect:

enforcement,
payment schedules,
reduced liability,
waiver of damages or interest,
partition or turnover arrangements,
withdrawal of further contest.

But once rights have vested in ways lawfully fixed by final and executory judgment, not everything can be freely undone without regard to legal effects on others.

26. Compromise and third persons

A compromise generally binds only the parties, their successors, or those legally represented, subject to ordinary contract and judgment principles.

It usually cannot prejudice a third person who:

was not a party,
did not authorize the settlement,
holds an independent right,
is a compulsory heir or protected person in contexts where the law limits compromise,
has a superior right not subject to private settlement.

This is very important in estate, property, corporate, and family-related disputes. Two people cannot validly settle away the rights of a third person who was not theirs to bind.

27. Compromise and solidarity or joint liability

Where several debtors or creditors exist, the effect of compromise may vary depending on whether the obligation is:

joint,
solidary,
divisible,
indivisible.

A compromise with one party does not always affect the others in the same way. Much depends on:

the nature of the obligation,
whether the release is intended to include all,
whether the compromise expressly reserves rights against others,
whether the settling party was acting for all.

This must be handled carefully in multi-party litigation and debt settlements.

28. Compromise in succession and estate disputes

Compromise is common in inheritance disputes, especially where heirs disagree on:

partition,
collation,
ownership of property,
accounting of estate assets,
reimbursement of advances,
administration disputes.

But the limits remain important. Parties cannot compromise matters prohibited by law, especially where future legitime or the rights of protected heirs are affected in a prohibited way.

Where all proper parties are before the agreement and the subject is lawfully disposable, compromise can be a very effective way to end estate conflict.

29. Compromise in property disputes

Property disputes are among the most common settings for compromise agreements. These include:

co-ownership partitions,
boundary settlements,
possession disputes,
easement issues,
lease arrears,
real estate payment defaults,
claims over improvements,
damages due to encroachment.

In such cases, a compromise may include:

agreed metes and bounds,
payment for occupancy,
transfer timelines,
demolition or removal agreements,
issuance of title-related documents,
release of claims for damages,
possession turnover schedules.

If land is involved, clarity in descriptions is vital. Vague settlement language can produce new litigation instead of ending the old one.

30. Compromise in commercial and debt matters

In business practice, compromise agreements often appear in:

collection cases,
supplier disputes,
unpaid invoices,
loan restructuring,
guaranty settlements,
franchise or distribution disputes,
shareholder or partnership conflicts,
construction claims,
insurance disputes.

These agreements may include:

discounted payoff,
staggered payments,
collateral release,
restructuring of maturity,
waiver of part of interest or penalties,
mutual releases,
confidentiality,
dispute withdrawal.

Because these often involve substantial amounts, precision in drafting is essential.

31. Compromise and labor disputes

Although this article is centered on the Civil Code, labor disputes deserve mention because compromise agreements are common there too. However, labor settlements are treated with special caution because labor law is protective in nature.

A labor compromise, release, or quitclaim may be closely scrutinized to determine:

voluntariness,
fairness,
adequacy of consideration,
absence of coercion,
compliance with labor standards and public policy.

So even if a document resembles an ordinary Civil Code compromise, labor law may impose stricter protective review.

32. Compromise and family matters

Compromise in family-related issues must be approached carefully. Some aspects of family disputes may be compromised, especially patrimonial or property-related matters. But issues involving:

marriage validity,
legal separation grounds,
civil status,
future support,
rights specially protected by family law

cannot be freely compromised as ordinary private claims.

For example, spouses may settle certain property consequences, but they cannot by private agreement make a void marriage valid or erase legal requirements imposed by family law.

33. Effect on evidence and admissions

A valid compromise often includes clauses stating that:

neither party admits fault,
the settlement is a compromise of disputed claims,
prior allegations are withdrawn,
no admission shall be used elsewhere.

These clauses may be useful, but their effect depends on context. Once a party signs the compromise, the obligations under it are enforceable regardless of disclaimer language.

The law encourages settlement, so compromise discussions and compromise outcomes are often treated differently from ordinary admissions of wrongdoing. But a final signed settlement is still a real source of legal rights and obligations.

34. Remedies against an invalid compromise

A party challenging a compromise may seek appropriate remedies depending on the defect alleged, such as:

annulment,
declaration of nullity,
rescission where legally proper,
refusal of enforcement,
petition to set aside judicial approval,
action based on lack of authority,
action based on fraud or vitiated consent.

The proper remedy depends on whether the defect makes the agreement:

void,
voidable,
rescissible,
unenforceable,
or merely breached.

This is one reason careful legal classification matters.

35. Common grounds for attacking a compromise

Compromise agreements are commonly challenged on grounds such as:

no real meeting of minds,
no authority of signatory,
fraud,
intimidation,
mistake,
forged signature,
absence of reciprocal concessions,
unlawful subject matter,
violation of public policy,
compromise of non-compromisable matters,
ambiguity so severe that enforcement is impossible,
lack of court jurisdiction in judicial settings,
rights of third parties unlawfully prejudiced.

But courts generally do not set aside compromises lightly. Because the law favors settlement, the attack must rest on solid legal grounds.

36. Common drafting mistakes

Many compromise disputes are caused by poor drafting, such as:

vague statement of the claim being settled,
unclear payment dates,
no default clause,
no acceleration clause,
no treatment of partial payments,
no definition of what claims are released,
no identification of case number in pending litigation,
no statement on whether dismissal is with prejudice,
no provision on taxes, transfer costs, or documentary requirements,
no authority documents for corporate signatories,
no clause on what happens if one party fails to withdraw a complaint,
no specification of whether prior causes of action revive.

A short settlement is not necessarily a bad one, but lack of precision is risky.

37. Is a compromise agreement immediately enforceable?

If extrajudicial, it is enforceable as an ordinary contract, which may require filing an action if breached.

If judicially approved as a judgment upon compromise, it is generally enforceable like a judgment, often through execution in the same case.

This is one of the practical reasons parties often submit the compromise to the court when there is already a pending case. Judicial approval gives the settlement stronger procedural teeth.

38. Compromise and execution

Where there is a judgment upon compromise, the prevailing party may seek execution if the other party fails to comply.

Examples:

unpaid installments under judicial settlement,
refusal to vacate property despite compromise,
failure to deliver title documents,
non-payment of agreed damages,
non-compliance with turnover provisions.

Execution is powerful because it avoids the need to relitigate the already-settled dispute.

39. Can a compromise be oral?

Theoretically, some compromises may be orally formed if the essential elements of a contract are present and no special form is required by law for the subject matter. But as a practical matter, oral compromise is dangerous.

Problems include:

proof difficulties,
disagreement on exact terms,
uncertainty about scope of release,
evidentiary limitations,
later denial by the parties.

In Philippine legal practice, a compromise should almost always be reduced to writing.

40. The role of good faith

Compromise agreements are governed by the general duty of good faith in contract performance.

Good faith matters in:

interpreting ambiguous clauses,
determining whether default was substantial,
deciding whether enforcement is abusive,
assessing whether one party concealed decisive facts,
construing release provisions,
evaluating compliance with installment obligations.

A party who signs in bad faith, conceals defects, or manipulates performance may still face legal consequences even under a formally valid agreement.

41. Practical examples of compromise under Philippine law

Example 1: Debt collection

A creditor claims ₱500,000. The debtor disputes interest and penalties. They settle for ₱350,000 payable in six monthly installments, with waiver of the remainder upon full payment. That is a classic compromise.

Example 2: Land boundary

Two neighbors dispute a fence line. Instead of litigating title and survey issues fully, they agree on a mutually accepted line and execute deeds consistent with it. That is a compromise.

Example 3: Pending civil case

In a damages suit, the defendant agrees to pay a lump sum and the plaintiff agrees to dismiss all claims with prejudice. The court approves the agreement. That becomes a judgment upon compromise.

Example 4: Estate dispute

Heirs disagree on the share of certain properties. They settle distribution and waive further claims against one another, subject to lawful limits. That is a compromise, assuming the subject is legally compromisable.

42. Basic structure of a Philippine compromise agreement

A typical compromise agreement in Philippine practice may follow this pattern:

title,
parties,
recitals,
acknowledgment of dispute,
statement of settlement intent,
obligations of first party,
obligations of second party,
release and waiver clauses,
default consequences,
withdrawal or dismissal of claims,
venue or implementation clause where proper,
signatures,
witnesses,
notarization where chosen.

The exact form depends on the dispute.

43. Why courts respect compromise agreements

Courts generally respect compromises because they:

reflect party autonomy,
conserve judicial resources,
end uncertainty,
encourage peace,
reduce adversarial burdens.

For that reason, once a compromise is shown to be voluntary, lawful, and clear, courts are usually inclined to enforce rather than undo it.

The policy favoring compromise is strong, but it is not blind. The courts will not enforce what is illegal, fraudulent, or clearly unjust in a legally recognizable way.

44. The single most important warning

The single most important practical lesson is this:

A compromise agreement is not just a temporary arrangement. It can permanently settle rights, extinguish claims, and bar future litigation.

Many parties sign settlement papers thinking they can later “explain” or “reopen” things if the result becomes inconvenient. That is often a serious mistake. Once validly made, compromise is intended to end disputes, not preserve them.

45. Bottom line

Under the Philippine Civil Code, a compromise agreement is a contract by which parties, through reciprocal concessions, avoid litigation or terminate one already begun. It is legally favored because it promotes settlement, peace, and efficiency. But it is also a serious binding undertaking with major legal consequences.

A valid compromise:

requires consent, lawful object, and cause,
must involve legally compromisable matters,
cannot cover subjects prohibited by law such as civil status, marriage validity, future support, jurisdiction, and future legitime,
binds the parties with the force of law,
may bar future litigation on the same matter,
and when judicially approved, may become a judgment upon compromise enforceable like a final judgment.

Its strengths are speed, certainty, flexibility, and finality. Its risks are overbroad waiver, unclear drafting, unauthorized execution, and improper compromise of non-disposable rights. In Philippine law, compromise is encouraged—but once validly entered into, it is meant to settle the dispute for real.