diff --git a/README.md b/README.md
index 8f95258..3c9ef8d 100644
--- a/README.md
+++ b/README.md
@@ -280,18 +280,9 @@ sections. The above examples could also be represented as:
     Hello {{#class}}{{name}}{{/class}}!
 
 Note also that one semantic difference exists between nested singleton sections
-and compound variables: compound variables do not make use of the default value
-and null value configuration. If a null or missing value is encountered while
-resolving a compound variable, an exception is always raised.
-
-If you desire for a default value to be used when null or missing values are
-encountered, use the somewhat more verbose singleton sections. The use of
-sections clearly communicates to someone reading the template that the section
-will not be rendered if the object it references is missing or null and allows
-for a site-specific default value to be used, as in:
-
-    {{#foo}}{{name}}{{/foo}}
-    {{^foo}}Missing foo!{{/foo}}
+and compound variables: after resolving the object for the first component of
+the compound variable, parent contexts will not be searched when resolving
+subcomponents.
 
 Newline trimming
 ----------------
diff --git a/src/main/java/com/samskivert/mustache/Mustache.java b/src/main/java/com/samskivert/mustache/Mustache.java
index 2e239e1..8867fd8 100644
--- a/src/main/java/com/samskivert/mustache/Mustache.java
+++ b/src/main/java/com/samskivert/mustache/Mustache.java
@@ -85,9 +85,7 @@ public class Mustache
 
         /** Returns a compiler that will use the given value for any variable that is missing, or
          * otherwise resolves to null. This is like {@link #nullValue} except that it returns the
-         * supplied default for missing keys and existing keys that return null values. Note that
-         * regardless of whether a null or default value is configured, if the resolution of part
-         * of a compound key results in a missing or null value, an exception will be raised. */
+         * supplied default for missing keys and existing keys that return null values. */
         public Compiler defaultValue (String defaultValue) {
             return new Compiler(this.escapeHTML, this.standardsMode, defaultValue, true,
                                 this.loader, this.collector);
@@ -103,10 +101,7 @@ public class Mustache
          * <li>In the case of a {@link Map} being used as a context, all possible accessors are
          * assumed to exist (but potentially return null), and no exception will ever be
          * raised.</li>
-         * </ul>
-         * Note that regardless of whether a null or default value is configured, if the resolution
-         * of part of a compound key results in a missing or null value, an exception will be
-         * raised. */
+         * </ul> */
         public Compiler nullValue (String nullValue) {
             return new Compiler(this.escapeHTML, this.standardsMode, nullValue, false,
                                 this.loader, this.collector);
diff --git a/src/main/java/com/samskivert/mustache/Template.java b/src/main/java/com/samskivert/mustache/Template.java
index bc31afb..4ca8e5b 100644
--- a/src/main/java/com/samskivert/mustache/Template.java
+++ b/src/main/java/com/samskivert/mustache/Template.java
@@ -93,13 +93,12 @@ public class Template
                 Object data = getValue(ctx, comps[0].intern(), line, missingIsNull);
                 for (int ii = 1; ii < comps.length; ii++) {
                     if (data == NO_FETCHER_FOUND) {
-                        throw new NullPointerException(
+                        if (!missingIsNull) throw new MustacheException(
                             "Missing context for compound variable '" + name + "' on line " + line +
                             ". '" + comps[ii - 1] + "' was not found.");
+                        return null;
                     } else if (data == null) {
-                        throw new NullPointerException(
-                            "Null context for compound variable '" + name + "' on line " + line +
-                            ". '" + comps[ii - 1] + "' resolved to null.");
+                        return null;
                     }
                     // once we step into a composite key, we drop the ability to query our parent
                     // contexts; that would be weird and confusing
@@ -214,12 +213,9 @@ public class Template
     protected Object checkForMissing (String name, int line, boolean missingIsNull, Object value)
     {
         if (value == NO_FETCHER_FOUND) {
-            if (missingIsNull) {
-                return null;
-            } else {
-                throw new MustacheException(
-                    "No method or field with name '" + name + "' on line " + line);
-            }
+            if (missingIsNull) return null;
+            throw new MustacheException(
+                "No method or field with name '" + name + "' on line " + line);
         } else {
             return value;
         }
diff --git a/src/test/java/com/samskivert/mustache/MustacheTest.java b/src/test/java/com/samskivert/mustache/MustacheTest.java
index 3a55f33..eed5800 100644
--- a/src/test/java/com/samskivert/mustache/MustacheTest.java
+++ b/src/test/java/com/samskivert/mustache/MustacheTest.java
@@ -259,7 +259,7 @@ public class MustacheTest
                 execute(context("things", Arrays.asList("bar", "baz", "bif"))));
     }
 
-    @Test public void testStructuredVariable () {
+    @Test public void testCompoundVariable () {
         test("hello", "{{foo.bar.baz}}", new Object() {
             Object foo () {
                 return new Object() {
@@ -271,25 +271,39 @@ public class MustacheTest
         });
     }
 
-    @Test(expected=NullPointerException.class)
+    @Test(expected=MustacheException.class)
     public void testNullComponentInCompoundVariable () {
-        // make sure that even if we have a null value configured, we freak out
-        test(Mustache.compiler().nullValue("foo"), "unused", "{{foo.bar.baz}}", new Object() {
-            Object foo () {
-                return new Object() {
-                    Object bar = null;
-                };
-            }
+        test(Mustache.compiler(), "unused", "{{foo.bar.baz}}", new Object() {
+            Object foo = new Object() {
+                Object bar = null;
+            };
         });
     }
 
-    @Test(expected=NullPointerException.class)
+    @Test(expected=MustacheException.class)
     public void testMissingComponentInCompoundVariable () {
-        // make sure that even if we have a default value configured, we freak out
-        test(Mustache.compiler().defaultValue("foo"), "unused", "{{foo.bar.baz}}", new Object() {
-            Object foo () {
-                return new Object(); // no bar
-            }
+        test(Mustache.compiler(), "unused", "{{foo.bar.baz}}", new Object() {
+            Object foo = new Object(); // no bar
+        });
+    }
+
+    public void testNullComponentInCompoundVariableWithDefault () {
+        test(Mustache.compiler().nullValue("null"), "null", "{{foo.bar.baz}}", new Object() {
+            Object foo = null;
+        });
+        test(Mustache.compiler().nullValue("null"), "null", "{{foo.bar.baz}}", new Object() {
+            Object foo = new Object() {
+                Object bar = null;
+            };
+        });
+    }
+
+    public void testMissingComponentInCompoundVariableWithDefault () {
+        test(Mustache.compiler().defaultValue("?"), "?", "{{foo.bar.baz}}", new Object() {
+            // no foo, no bar
+        });
+        test(Mustache.compiler().defaultValue("?"), "?", "{{foo.bar.baz}}", new Object() {
+            Object foo = new Object(); // no bar
         });
     }