A gentleman's agreement, more commonly “gentlemen's agreement” since presumably all parties involved are gentlemen, is an unwritten agreement. It is not legally binding and cannot be enforced in a court of law. Instead, the parties rely on the integrity and honor of participants in the agreement. This can sometimes backfire, and people are strongly advised to secure a legally binding agreement in lieu of an informal arrangement for their protection, as well as the protection of the other party.
The terms of a gentleman's agreement may be unstated, oral, or written. Writing down an agreement does not necessarily make it legally binding, as agreements need to meet certain terms to be considered legally binding contracts. The parties to the agreement reach a mutually acceptable arrangement and agree to trust each other to fulfill the terms. Such agreements were historically sealed with a handshake, a concept referenced when people “agree to shake on it” when deciding on the terms of an arrangement.
This term dates to the 1800s, when it was first used in the railroad industry in the United States, although the concept itself is much older. Informal agreements have determined everything from national sovereignty to ensuring that particular people get jobs. The gentleman's agreement has historically been criticized as a means of exclusion and sometimes such arrangements were used in highly abusive ways. One example could be seen in some regions of the United States historically when real estate agents informally agreed to discourage people of color from purchasing homes in white neighborhoods. By not openly stating or codifying the practice, real estate agents avoided running afoul of antidiscrimination laws.
In some cases, a gentleman's agreement can be a tool for facilitating a formal agreement at a later date or for streamlining proceedings. International organizations and other large groups may reach informal agreements while hashing out details. Taking time to write out and codify the agreement might be wasteful if everyone is in agreement; for example, people in a meeting could agree that people should not be allowed to speak for more than 10 minutes at a time to keep the meeting within a reasonable time limit.
The problem with a gentleman's agreement is that it is unenforceable, and if it is violated, the injured party has no legal recourse. For this reason, even when an agreement is made between friends, getting a legally binding contract is strongly recommended. For example, if someone agrees to rent a house to a friend, a standard lease contract could be used to generate a basic agreement to protect the friends in the event of a problem.