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Understanding A Compromise Agreement

Understanding A Compromise Agreement

A compromise agreement might in
a general sense be used to refer to the documentation which enforces a given compromise,
but in a more specific sense, it refers to a type of contract prevalent in the
United Kingdom. Compromise agreements are contracts between employers and
employees which are designed to ensure that the employee receives some amount
of restitution from the employer in exchange for the employee renouncing any
claim to further funds and any claim to an additional obligation from the

Most often compromise
agreements are instituted in situations when the employer has breached some
element of United Kingdom law or statute, such that the employee does have a
significant claim upon the employer of funds or of some other obligation.

compromise agreement would discharge this debt in a fashion potentially less
costly to the employer and most likely much more quickly than a full court

Compromise agreements may
sometimes be undesirable for the involved parties, particularly for the
employees who might have been harmed by the breach on the part of the employer,
but they will often have benefits for both sides. An employer who goes into a
compromise agreement will know that the issue will be wholly discharged with
the completion of the compromise agreement because the employee will have
signed a waiver saying that he or she has no more claim upon the issue. The
employee will also receive a clear monetary sum in exchange for this
renunciation, which he or she might not otherwise be able to obtain through
court proceedings against the employer.