What term describes a settlement of differences where each party makes concessions?

The term that describes a settlement of differences where each party makes concessions is “compromise.” A compromise occurs when two or more parties involved in a disagreement come together and agree to accept a mutual resolution that may involve giving up some of their demands or finding a middle ground. This process acknowledges that each party may not get everything they initially wanted but emphasizes the importance of reaching a solution that is acceptable to all involved.

Negotiation is a broader process that encompasses various strategies and tactics used to reach an agreement, and it doesn’t necessarily imply that concessions are made. Mediation refers to the involvement of an impartial third party who facilitates dialogue between the disputing parties, and while it can lead to a compromise, the term itself focuses on the role of the mediator rather than the outcome. Arbitration involves a third party making a binding decision for the disputing parties, which differs from a compromise where both parties voluntarily agree to make concessions. Therefore, the specific nature of a compromise accurately reflects the scenario described in the question.