Short answer. A compromise agreement is a contract where the parties make reciprocal concessions to avoid a lawsuit altogether or end one that has already started. Article 2028 defines it around that mutual give-and-take — each side gives up something to reach a settlement, rather than one side simply surrendering to the other's demands.

What the law says

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

Civil Code, Article 2028 — Compromise Defined. Read the full provision →

The core requirement: reciprocal concessions

Article 2028 defines a compromise as a contract where the parties act by making reciprocal concessions. That word "reciprocal" is doing real work — a compromise requires both sides to give up something, even if not equally. An arrangement where one party simply gets everything he originally demanded and the other gets nothing in return is not the kind of mutual concession this article describes, whatever else it might be called.

Two different moments a compromise can address

The article covers two distinct situations: the parties may use a compromise to avoid a litigation before any case has been filed, or to put an end to one already commenced after a lawsuit is already underway. Either way, the mechanism is the same contract — reciprocal concessions — just applied at a different stage of the same underlying dispute.

How a compromise actually ends a pending lawsuit

When the parties compromise a case that has already been filed, the agreement itself is what resolves the underlying dispute between them; the lawsuit no longer has a live controversy to decide once both sides have accepted their respective concessions. This is why a compromise is often the mechanism behind a case being terminated without a full trial on the merits — the parties have replaced the court's eventual judgment with their own negotiated resolution.

Why it is treated as a contract, not just a settlement gesture

Because Article 2028 defines a compromise as a contract, it is bound by the ordinary requirements a contract needs to be valid — consent, a proper object, and a lawful cause among them — not merely by whatever informal understanding the parties may have reached. Treating it as a contract also means a party who later regrets the concessions he made cannot simply walk away from it the way he might abandon an informal promise; the compromise carries the same binding force any other valid contract does.

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.

Related provisions

Note. Statute text quoted on this page is reproduced from the official enactment and is linked to the full provision. The explanation around it is general legal information from Vivas & Nobles Law Office, not legal advice. Whether it applies to your situation depends on facts only a lawyer reviewing them can assess.