UCPB V. SARINDERJIT BLUE RIVER NAVIGATION (CIVIL)

A COMPROMISE AGREEMENT is a contract whereby parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. It contemplates mutual concessions and mutual gains to avoid the expenses of litigation, or when litigation has already begun, to end it because of uncertainty of the result. The process of compromise has long been allowed in our jurisdiction and in the jurisdiction of other states as well.

The validity of the agreement is determined by compliance with the requisites and principles of contracts. Like any other contract, THE TERMS AND CONDITIONS OF A COMPROMISE AGREEMENT MUST NOT BE CONTRARY TO LAW, MORALS, GOOD CUSTOMS, PUBLIC POLICY, AND PUBLIC ORDER.