TRANSACTION. – It is the contract by which the parties put an end to a dispute or prevent its arising, by making mutual concessions (cf. art. 1965, Italian Civil Code).
For a transaction to take place, there must be uncertainty, at least subjective, regarding the relationship that is intended to be regulated thereby. It may have as its object patrimonial rights of any nature, including the pecuniary consequences relating to the status of persons and civil actions arising from a crime. However, one may transact only in respect of disposable rights.
A transaction in the process is an autocomposition of the dispute; faced with the risk of a judgment and the possible greater sacrifice, the parties may, by means of a contract of *aliquid datum et aliquid retentum*, resolve the *res dubia litigiosa*.
It is said that the transaction enjoys the favour of the law because it is a great good to avert litigation.
The spontaneous settlement of the dispute has intrinsic and formal characteristics different from jurisdictional resolution: the latter must rely exclusively on justice; in a transaction, the parties are satisfied not only materially but also morally, so much so that a transaction cannot be challenged on the ground 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 contested thing the minor premise, and the application of the law to the fact is the conclusion. The judgment can concern only existing disputes, whereas a transaction can prevent a dispute, and while all disputes can be decided by a judgment, a transaction cannot be the settlement of a dispute whose object is not within the disposal of the party (in canon law, for example, any agreement concerning *iura et res spiritualia*, and the indissolubility of marriage). A transaction can be annulled by those who created it; it is subject to rescission by mutual consent; a judgment, on the other hand, once it has become final, can no longer be modified. A transaction can take place at any stage and level of the process.
Nevertheless, there is equivalence between the judgment and the transaction: unlike any other type of contract, the transaction settles a legal controversy, and therefore, instead of having a constitutive effect, like contracts in general, 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 that which has been agreed upon. The transaction, in other words, is a source of ascertainment equivalent to the judgment.