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An agreement between two or more persons, who, to avoid a lawsuit, amicably settle their differences, on such terms as they can agree upon.
It will be proper to consider; 1. by whom the compromise must be made; 2. its form; 3. the subject of the compromise; 4. its effects.
It must be made by a person having a right and capacity to enter into the contract and carry out his part of it, or by one having lawful authority from such person.
The compromise may be by parol or in writing, and the writing may be under seal or not: though as a general rule a partner cannot bind his copartner by deed, unless expressly authorized, yet it would seem that a compromise with the principal is an act which a partner may do in behalf of his copartners and that, though under seal, it would conclude the firm.
The compromise may relate to a civil claim, either as a matter of contract or for a tort, but it must be of something uncertain; for if the debt be certain and undisputed, a payment of a part will not, of itself, discharge the whole. A claim connected with a criminal charge cannot be compromised.
The compromise puts an end to the suit, if it be proceeding, and bars any suit which may afterwards be instituted. It has the effect of res judicata.
In the civil law, a compromise is an agreement between two or more persons who, wishing to settle their disputes, refer the matter in controversy to arbitrators, who are so called because those who choose them give them full powers to arbitrate and decide what shall appear just and reasonable, to put an end to the differences of which they are made the judges.