TRANSACTION. - It is the contract by which the parties put an end to a dispute or prevent one from arising, making reciprocal concessions to each other (cf. art. 1965 of the Italian Civil Code).
For a transaction to take place, there must be uncertainty, at least subjective, concerning the relationship that it is intended to regulate. It may have as its object patrimonial rights of any kind, including the pecuniary consequences relating to the status of persons and civil actions arising from a crime. One may, however, compromise only over rights that are disposable.
The transaction in a trial is a self-composition of the dispute; faced with the risk of the judgment and the greater possible sacrifice, the parties may, through the contract of aliquid datum and aliquid retentum, resolve the litigious res dubia.
It is said that the transaction enjoys the favor of the law because it is the greatest good to avert a lawsuit.
The spontaneous composition of the dispute has intrinsic and formal characteristics different from the jurisdictional solution: the latter must rest exclusively on justice; in the transaction the parties are satisfied not only materially but also morally, so much so that the transaction cannot be challenged on grounds of lesion (cf. art. 1970 of the Civil Code). The judgment is redditur in invitum, whereas the transaction consensu constat; the former is a syllogism of which the legal norm is the major premise, the fact, situation or thing contested the minor premise, and the application of the law to the fact is the conclusion. The judgment can concern only disputes already existing, whereas the transaction can prevent the dispute, and while all disputes can be decided by a judgment, the transaction cannot be the composition of a dispute whose object is not within the disponibility of the party (for canon law, for example, any agreement circa iura et res spiritualia, and the indissolubility of marriage). The transaction can be annulled by the very persons who brought it into being; it is subject to termination by mutual consent; the judgment, on the other hand, once it has become irrevocable, can no longer be modified. The transaction may take place at any stage and level of the trial.
Nevertheless, between the judgment and the transaction there is equivalence: unlike every other type of contract, the transaction composes a legal controversy, and therefore, rather than having a constitutive effect, as contracts in general do, it has a declaratory effect, of simple ascertainment: the parties, in substance, agree in holding that the relationship exists as the transaction establishes, or that the just application of the law is the one that has been stipulated by agreement. The transaction, in other words, is a source of ascertainment equivalent to the judgment.
Bibliography
Vittorio Trocchi