A gentlemen`s agreement, also known as a verbal agreement or an unwritten agreement, is an informal agreement between two or more parties. This type of agreement is often based on trust and mutual understanding, rather than written contracts or legal documents.
Gentlemen`s agreements are commonly used in business and other areas of life where parties need to work together towards a common goal. For example, an informal agreement may be made between two companies to limit their production or to refrain from taking certain actions that may harm the other party.
While gentlemen`s agreements may be effective in the short term, they can be problematic in the long run. This is because they are generally not legally enforceable, and there is no mechanism in place to ensure that all parties abide by the terms of the agreement.
Furthermore, gentlemen`s agreements may be used to carry out practices that are discriminatory or unfair. For example, a company may agree not to hire employees from a certain demographic, or to only work with suppliers who are affiliated with a particular group.
Despite these issues, gentlemen`s agreements continue to be used in many areas of life. They are often preferred over formal contracts because they are more flexible and less expensive to create.
However, it is important to remember that gentlemen`s agreements are only effective when all parties act in good faith. If one party decides to break the agreement, there is generally little that can be done to enforce it.
In conclusion, gentlemen`s agreements are an informal way for parties to work together without the need for formal contracts or legal documents. While they may be effective in the short term, they are generally not legally enforceable and can be problematic in the long run. It is important for all parties to act in good faith and to be aware of the limitations of these types of agreements.