Gentlemen’s Agreements

So what is the so-called ‘Gentlemen’s Agreement’?

More often than not a Gentlemen’s Agreement will be a verbal agreement, i.e. the terms of the contract agreed orally.  Although verbal agreements are enforceable and valid (contracts do not need to be in writing), where a dispute arises between parties to an agreement, the absence of written terms can be problematic, to say the least.

Disputes are inevitable…

A contract, whether written or made orally, is rarely safe from the potential of parties disputing its terms and one party’s obligations to another.  However, it is generally easier to determine where a party stands when the terms of an agreement are set out in writing and further, drafted clearly.

You have to ask yourself, if say a judge, an arbitrator or a mediator were required to intervene with your dispute, whether you would you feel more confident relying on written evidence on the table, or your word against that of another?

Of course, a written agreement does not always present the full story and parties may vary the terms of an agreement as matters progress.  It is important to ensure records are retained of agreed variations and supporting correspondence (again…in writing!).

Risk Management

Drafting clear and effective terms will often allow disputes (if they arise) to be resolved before they escalate.

Gentleman’s Agreements will inevitably not cover all aspects of a deal and disputes often arise from issues which are not contemplated at the outset.  Hindsight is a wonderful thing…

An experienced legal advisor will help you to fill the gaps and incorporate safety provisions after contemplating potential future risks.

Costs of litigation when attempting to resolve a dispute can be high and in cases have the potential to escalate beyond the value of the goods or services on which the contract is based.

Disputes can be very time consuming and can be disruptive to your day-to-day running of a business.  Trying to pull together evidence to support the oral terms of a Gentlemen’s Agreement can take away time better spent sourcing new customers for your business.

You should also consider the damage which a dispute may cause to goodwill and/or relations you have spent time building over the years.

Written agreements do not have to be long and complicated and do not have to take long to prepare.


A little spent now can prevent a lot spent later. Need more advice? call: 01483 302000 email: guildford@rhw.co.uk