From man bash
(I don't know why the most voted answer is hidden):
set [+abefhkmnptuvxBCEHPT] [+o option-name] [arg ...]
(...)
-e
Exit immediately if a pipeline (which may consist of a single simple command), a list, or a
compound command (see SHELL GRAMMAR above), exits with a non-zero status. The shell does not
exit if the command that fails is part of the command list immediately following a while or un‐
til keyword, part of the test following the if or elif reserved words, part of any command exe‐
cuted in a && or || list except the command following the final && or ||, any command in a
pipeline but the last, or if the command's return value is being inverted with !. If a com‐
pound command other than a subshell returns a non-zero status because a command failed while -e
was being ignored, the shell does not exit. A trap on ERR, if set, is executed before the
shell exits. This option applies to the shell environment and each subshell environment sepa‐
rately (see COMMAND EXECUTION ENVIRONMENT above), and may cause subshells to exit before exe‐
cuting all the commands in the subshell.
If a compound command or shell function executes in a context where -e is being ignored, none
of the commands executed within the compound command or function body will be affected by the
-e setting, even if -e is set and a command returns a failure status. If a compound command or
shell function sets -e while executing in a context where -e is ignored, that setting will not
have any effect until the compound command or the command containing the function call com‐
pletes.