A gentlemen's agreement or gentleman's agreement is an informal and legally non-binding agreement between two or more parties. It is typically oral, though it may be written, or simply understood as part of an unspoken agreement by convention or through mutually beneficial etiquette. The essence of a gentlemen's agreement is that it relies upon the honor of the parties for its fulfillment, rather than being in any way enforceable. It is, therefore, distinct from a legal agreement or contract, which can be enforced if necessary.
The phrase appears in British Parliamentary records of 1821, and in Massachusetts public records of 1835. The Oxford English Dictionary cites P. G. Wodehouse's 1929 story collection Mr Mulliner Speaking as the first appearance of the term.
A gentleman's agreement, defined in the early 20th century as "an agreement between gentlemen looking toward the control of prices," was reported by one source to be the loosest form of a "pool". These types of agreements have been reported to be found in every type of industry, and are numerous in the steel and iron industries.
A report from the United States House of Representatives detailing their investigation of the United States Steel Corporation asserted that there were two general types of loose associations or consolidations between steel and iron interests in the 1890s, in which the individual concerns retained ownership as well as a large degree of independence: the "pool" and the "gentleman's agreement". The latter type lacked any formal organization to regulate output or prices, nor did they contain any provisions for forfeiture in the event of an infraction. The efficacy of the agreement relied on members to keep informal pledges.
In the automotive industry, Japanese manufacturers agreed that no production car would have more than 276 bhp (206 kW; 280 PS); this agreement ended in 2005. German manufacturers limit the top speed of high-performance saloons (sedans) and station wagons to 250 kilometres per hour (155 mph). When the Suzuki Hayabusa motorcycle exceeded 310 km/h (190 mph) in 1999, fears of a European ban or regulatory crackdown led Japanese and European motorcycle makers to agree to a limit of 300 km/h (186 mph) in late 1999. See List of fastest production motorcycles.
Intense anti-Japanese sentiment developed on the West Coast. US President Theodore Roosevelt did not want to anger Japan by passing legislation to bar Japanese immigration to the US, as had been done for Chinese immigration. Instead, there was an informal "Gentlemen's Agreement" (1907–8) between the United States and Japan, whereby Japan made sure there was very little or no movement to the US. The agreements were made by Secretary of State, Elihu Root, and Japan's Foreign Minister, Tadasu Hayashi. The agreement banned emigration of Japanese laborers to the US and rescinded the segregation order of the San Francisco School Board in California, which had humiliated and angered the Japanese. The agreement did not apply to the Territory of Hawaii, which was treated at the time as separate and distinct from the US. The agreements remained effective until 1924, when Congress forbade all immigration from Japan.
Gentlemen's agreements have come to regulate international activities such as the coordination of monetary or trade policies. According to Edmund Osmańczyk in the Encyclopedia of the United Nations and International Agreements, it is also defined as "an international term for an agreement made orally rather than in writing, yet fully legally valid". This type of agreement may allow a nation to avoid the domestic legal requirements to enter into a formal treaty, or it may be useful when a government wants to enter into a secret agreement that is not binding upon the next administration. According to another author, all international agreements are gentlemen's agreements because, short of war, they are all unenforceable. Osmańczyk pointed out that there is a difference between open gentlemen's agreements and secret diplomatic agreements. In the United States, a prohibition against gentlemen's agreements in commercial relations between states was introduced in 1890, because the secretive nature of such agreements was beyond anyone's control.
In English contract law, for an agreement to be binding, there must be an intention to create legal relations; but in commercial dealings (i.e. agreements that are not between family members or friends) there is a legal presumption of an "intention to create legal relations". However, in the 1925 case of Rose & Frank Co v JR Crompton & Bros Ltd, the House of Lords held that the phrase, "This arrangement is not ... a formal or legal agreement ... but is only a record of the intention of the parties" was sufficient to rebut the said presumption.
Gentlemen's agreements were a widely used discriminatory tactic reportedly more common than restrictive covenants in preserving the homogeneity of upper-class neighborhoods and suburbs in the United States. The nature of these agreements made them extremely difficult to prove or to track, and were effective long after the United States Supreme Court's rulings in Shelley v. Kraemer and Barrows v. Jackson. One source states that gentlemen's agreements "undoubtedly still exist", but that their use has greatly diminished.