We signed a compromise agreement but the other side now wants it to cover a different claim we never discussed - does it?

Compromise is strictly limited to its stated scope

Article 2036 of the Civil Code establishes a clear rule on the scope of a compromise: A compromise comprises only those objects which are definitely stated therein, or which by necessary implication from its terms should be deemed to have been included in the same. A compromise agreement is not a general peace treaty that resolves everything between the parties. It resolves only what it covers — expressly or by necessary implication. Claims that were not discussed, not stated in the agreement, and not necessarily implied by its terms remain open. The other side cannot unilaterally expand the coverage of the compromise to include a different claim.

Necessary implication is a narrow exception

The phrase by necessary implication from its terms is a narrow exception to the rule of express coverage. A claim is covered by necessary implication only when it logically must be included given the nature and terms of the compromise — not when it would be convenient, or arguably related, or when someone can construct a plausible argument for inclusion. If the claim the other side wants covered is truly separate and was never raised in the negotiations that led to the agreement, it is not a matter of necessary implication. The test is whether the compromise would make no sense, or could not function, without including that particular claim.

General renunciation clauses have limited reach

Compromise agreements sometimes include broad language renouncing all claims, all rights, or all causes of action. Article 2036 addresses this directly: A general renunciation of rights is understood to refer only to those that are connected with the dispute which was the subject of the compromise. A sweeping waiver clause does not override the article's rule. It is read as referring to rights connected to the specific dispute settled by the compromise — not to every conceivable claim between the parties, however unrelated. A broad clause cannot be used to expand the compromise to claims that were never part of the dispute the parties actually resolved.

Practical implications for your situation

If the other side is trying to use the compromise agreement to bar a claim that was never part of the discussions and is not expressly or necessarily covered by the agreement, Article 2036 provides the legal basis to resist that attempt. The agreement covers what it covers and no more. You should identify precisely whether the new claim is stated in the agreement, whether it necessarily follows from what was agreed, or whether it relates to the specific dispute the compromise resolved. If the answer to all three questions is no, the claim is outside the compromise and may be pursued or defended on its own terms, as if no compromise agreement existed regarding it.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

• Dana S. Santos vs. Leodegario R. Santos, G.R. No. 214593, July 17, 2019 — read the decision on LawPhil →
• Iligan Bay Mfg. Corp. et al vs. Henry Dy, G.R. No. 140836 / G.R. No. 140907, June 8, 2007 — read the decision on LawPhil →
• Filcon Manufacturing Corporation vs. Lakas Manggagawa sa Filcon-Lakas Manggagawa Labor Center (LMF-LMLC), G.R. No. 150166, July 26, 2004 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 2036 — Scope of a Compromise