A gentlemen`s agreement is a term that refers to an agreement or understanding between two parties that is not legally binding. A gentlemen`s agreement is often based on mutual trust, respect, and honor, and it is typically sealed by a handshake.
The history of gentlemen`s agreements can be traced back to the 19th century, when it was used to describe the informal agreements between the United States and Japan. In this agreement, the United States agreed to limit Japanese immigration to the United States, in exchange for Japan`s promise to limit the emigration of its citizens to the United States.
However, the term gentlemen`s agreement became more popular during the 20th century, particularly during the early 20th century, when it was frequently used in the business world. In this context, gentlemen`s agreements were often used to avoid the legalities of a written contract. This was particularly common in the stock market, where traders and investors would often agree to buy or sell stocks based on informal agreements.
Gentlemen`s agreements were also used in the automotive industry to regulate the production and distribution of vehicles. For example, in the early days of the automobile industry, car manufacturers agreed not to sell their vehicles on Sundays in order to respect the religious beliefs of many Americans.
Despite its informal nature, a gentlemen`s agreement is often respected by both parties. This is because the agreement is based on mutual trust and respect. If one party were to break the agreement, it could damage their reputation and future business prospects.
In conclusion, a gentlemen`s agreement is a non-binding agreement that is often based on trust and respect. Although informal, these agreements are often respected by both parties and can be used in a variety of contexts, from international diplomacy to business agreements.