What is the legal definition and permissibility of a truce (Hudnah) with people of war?

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A truce (Hudnah), also called Muhadanah, Muwada'ah, or Mu'ahadah, is the act of concluding an agreement with people of war to cease fighting for a specified period, with or without compensation. This is permissible. The evidence for this permissibility rests on the statements of Allah, such as "A disavowal from Allah and His Messenger to those with whom you made a treaty among the polytheists" (Quran 9:1) and "But if they incline to peace, then incline to it" (Quran 8:61). Furthermore, it is established that the Prophet, peace be upon him, made peace with Suhayl ibn Amr at Hudaybiyyah for a period of ten years, as narrated by Marwan and Miswar ibn Makhramah. The justification for a truce is to serve the Muslims' welfare, such as when Muslims are too weak to fight, or if there is hope that the truce will lead to the enemy's conversion to Islam, the payment of the Jizyah, or adherence to the regulations of the faith.