Legal Definitions - compromise

A compromise is a formal agreement reached between two or more parties who are in disagreement, where each party makes concessions—meaning they give up something they originally wanted or believed they were entitled to—in order to resolve their dispute. The primary goal of a compromise is to settle a conflict or uncertainty without the need for a lengthy and potentially costly legal battle, such as a trial. It results in a mutually acceptable resolution that avoids further contention.

• Example 1: Business Contract Dispute

  A small manufacturing company delivered a large order of custom parts to a client, but the client claimed some parts were defective and refused to pay the final 20% of the invoice. The manufacturing company insisted all parts met specifications. Instead of initiating a lawsuit, both parties engaged in negotiation.

  How it illustrates compromise: The manufacturing company agreed to offer a 10% discount on the remaining balance and provide expedited replacements for the disputed parts, while the client agreed to pay the revised amount immediately and drop their claim for further damages. Both sides made concessions (the manufacturer accepted less money, the client accepted a partial discount instead of a full refund or replacement for all parts) to avoid a prolonged legal dispute and maintain their business relationship.

• Example 2: Personal Injury Settlement

  After a slip-and-fall accident at a grocery store, an individual filed a claim against the store for medical expenses, lost wages, and pain and suffering, totaling $75,000. The store's insurance company argued that the individual was partly at fault and offered only $30,000.

  How it illustrates compromise: Rather than going to trial, which would be expensive and uncertain for both sides, the individual's lawyer and the insurance company negotiated. They ultimately agreed to a settlement of $50,000. The individual compromised by accepting less than their initial demand, and the insurance company compromised by paying more than their initial offer, thereby resolving the claim without litigation.

• Example 3: Neighborly Property Line Dispute

  Two neighbors discovered that a fence separating their properties was not built precisely on the legal property line, encroaching slightly onto one neighbor's land. The neighbor whose land was encroached upon wanted the fence moved, while the other neighbor, who had maintained the fence for years, did not want the expense or hassle of moving it.

  How it illustrates compromise: Instead of escalating the dispute, they agreed that the fence would remain in its current location, but the neighbor whose land was encroached upon would receive a small, one-time payment for the slight loss of land, and the other neighbor would take on full responsibility for all future fence maintenance. Both parties made concessions (one accepted money instead of moving the fence, the other paid money and took on maintenance) to resolve the boundary uncertainty amicably and preserve their neighborly relations.