Fail if one command returns non-zero code in script

You should make your scripts executable and let the scripts themselves define the shell to be used to execute them. Then you can add flags to the interpreter line to address questions like the one you've raised.

This could cause the script to exit on first error:

#!/bin/sh -e
../configure
make
make install

Unfortunately you can't do it the easy and self-contained way because you specify the interpreter (shell) to use at the point you call the scripts.

So instead of that you either need to add the -e flag to the shell at the point you use it to invoke the script, which is messy because you're putting program logic outside the program itself:

sh -e somescript.sh

or add set -e near the top of the script.

Now you've provided your actual scripts you need a different answer. The problem with your script 01 is that you don't check that you can write to dummy.c. This is what's causing the Permission denied message, and probably but not necessarily the subsequent g++ compilation failed message. You don't capture the error, and your 01 script exits successfully regardless of its actual status. In turn this causes timeout to exit successfully.

File timeout

#!/bin/sh
timeout 18900 su lfs -c "$*"
exitcode=$?
echo $exitcode

#succeed on timeout
[ $exitcode -eq 124 ] && exit 0
exit $exitcode

File 01

#!/bin/sh
./prepare
echo "$LFS"
echo "$LFS_TGT"
echo "$PATH"
echo "$CONFIG_SITE"
echo 'int main(){}' > dummy.c && g++ -o dummy dummy.c && [ -x dummy ]
exitcode=$?

if [ $exitcode -eq 0 ]
  then echo "g++ compilation OK"
  else echo "g++ compilation failed"
fi

rm -f dummy.c dummy
exit $exitcode

We're not using it here, but for future reference the set -e option (regardless of how it's enabled) has a particular set of rules. Principally, but not exclusively,

• Do not exit if the failing command is part of a loop or branch condition (if/elif, while, until)
• If a plain command fails, or the last command of a pipeline or list fails, then exit
• If the final result of a compound joined with && or || fails, then exit

If you have a command that might fail, but you want to ignore the exit status, you can append || true to ensure the resulting compound is always true.