A gentleman`s agreement, defined at the beginning of the 20th century as “an agreement between gentlemen who looks at price control,” has been described by one source as the most lax form of a “pool.”  Such agreements have been declared in all industrial sectors and are numerous in the steel and steel industry.  A gentleman`s agreement, which is rather a point of honour and etiquette, is based on the indulgence of two or more parties for the performance of verbal or tacit obligations. Unlike a binding contract or a legal agreement, there is no legal remedy for violation of a gentlemen`s agreement. Despite their informal nature, the violation of a gentlemen`s agreement could have negative consequences on trade relations if a party decides not to keep its promise. A gentlemen`s agreement can also be described as a “gentleman`s agreement” and can be completed by a handshake or not. Gentlemen`s agreements have come to regulate international activities as the coordination of monetary or trade policies.  According to Edmund Osmasczyk in the United Nations Encyclopedia and International Agreements, it is also defined as “an international term for an oral and unwritten but fully valid agreement.”  This type of agreement may allow a nation to circumvent national legal requirements to enter into a formal contract or it may be useful for a government to want to enter into a secret agreement that does not engage the next government.  According to another author, all international agreements are gentlemen`s agreements because, just before the war, they are all unenforceable.  Osmaczyk noted that there was a difference between gentlemen`s open agreements and secret diplomatic agreements.  In the United States, in 1890, the prohibition of gentlemen`s agreements was introduced in interstate trade relations because the secrecy of these agreements was beyond anyone`s control.  In many cases, the end result may be a higher cost or lower quality products for consumers. Worse, a gentlemen`s agreement can be used as a means of promoting discriminatory practices, as in a “network of old boys.” A gentlemen`s agreement is an informal agreement or transaction, often unwritten, which is supported only by the integrity of the other party to effectively comply with its terms. Such an agreement is generally informal, oral and not legally binding.
En Gentleman Agreement