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Gentlemen's agreement

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A gentlemen's agreement is an informal arrangement between two or more parties. It is characterized by being legally non-binding, meaning it cannot be enforced by a court of law. These agreements are typically oral, though they can be written or understood through social convention. The core mechanism of such a deal is the honor of the participants. Instead of legal penalties, the agreement relies on the parties to fulfill their promises to maintain their reputation. A more formal but still non-binding version is known as a memorandum of understanding.

In business, these agreements function as loose associations. In the early 20th century, the term described deals between gentlemen aimed at controlling prices. These were considered the loosest form of a "pool," which is a type of business grouping. In the 1890s, the United States steel and iron industries used them frequently. Unlike formal consolidations, these agreements lacked an official organization to regulate prices or output. There were also no provisions for punishment if a member broke their pledge. The efficacy of the system depended entirely on members keeping their informal promises.

Specific industries have used these agreements to set technical standards. For example, Japanese automobile manufacturers once had an agreement regarding vehicle speed. They agreed that no production car would exceed 186 mph. This specific agreement ended in 2005. Similarly, German manufacturers limit the top speed of high-performance sedans and station wagons to 250 km/h. Some companies, like Mercedes-Benz, allow customers to pay to remove these limiters. In 1999, motorcycle makers also reached an agreement. After the Suzuki Hayabusa exceeded 300 km/h, makers agreed to a 300 km/h limit to avoid regulatory crackdowns.

History shows the term appearing in various official records over time. The phrase was found in British parliamentary records in 1821. It also appeared in Massachusetts public records in 1835. The Oxford English Dictionary notes a 1929 story by P. G. Wodehouse as an early literary use. These historical markers show how the concept of informal social honor has been documented for centuries.

In international relations, these agreements can manage complex political tensions. Between 1907 and 1908, the United States and Japan utilized an informal "Gentlemen's Agreement." US Secretary of State Elihu Root and Japan's Foreign Minister Tadasu Hayashi negotiated it. This deal addressed anti-Japanese sentiment on the US West Coast. It banned the emigration of Japanese laborers to the US and rescinded a segregation order by the San Francisco School Board. A similar arrangement, the Hayashi-Lemieux Agreement, occurred in Canada. These informal deals remained in place until 1924, when Congress banned all immigration from Japan.

Trade policies also rely on these informal methods to coordinate global activities. Some experts define them as international oral agreements that are considered fully valid. They can allow a nation to avoid the domestic legal requirements of a formal treaty. They are also useful for governments wanting to enter secret agreements. Such deals are not binding upon a future administration. One perspective suggests all international agreements are essentially gentlemen's agreements because they are mostly unenforceable without war. However, there is a distinction between open agreements and secret diplomatic deals.

Unfortunately, gentlemen's agreements have been used as tools for discrimination. In the United States, they were used to keep neighborhoods homogeneous. These deals were often used to preserve upper-class suburbs by excluding certain groups. Because they were informal, they were extremely difficult for authorities to track or prove. This practice continued even after the Supreme Court ruled against such tactics in cases like Shelley v. Kraemer. In professional sports, a gentlemen's agreement excluded African American players from organized baseball. This lasted until 1946, when Jackie Robinson was hired by the Brooklyn Dodgers.

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