Gentleman's Agreement

A A A

DEFINITION

An unwritten agreement or transaction backed only by the integrity of the counterparty to actually abide by the terms of the agreement. An agreement like this is not legally binding and could have a negative effect on business relationships if one party decides to default on their promise.

INVESTOPEDIA EXPLAINS

For example, if an employee at a company says they will get you a job and you have nothing to worry about, this is an example of a gentleman's agreement. However if they are unable to get you the job then you have no legal recourse.


RELATED TERMS
  1. Heads Of Agreement

    A non-binding document outlining the main issues relevant to a tentative partnership ...
  2. Hell or High Water Contract

    A non-cancelable contract whereby the purchaser must make the specified payments ...
  3. Transaction

    1. An agreement between a buyer and a seller to exchange goods, services or ...
  4. Payer

    An entity that makes a payment to another. While the term payer generally refers ...
  5. Payee

    The party in an exchange who receives payment. A payee is paid in cash, check ...
  6. Non-Disclosure Agreement - NDA

    A legal contract between two or more parties that signifies a confidential relationship ...
  7. Confidentiality Agreement

    A legal agreement between two or more parties that is used to signify that a ...
  8. BHD (Berhad)

    The suffix Bhd. is an abbreviation of a Malay word "berhad," which ...
  9. AG (Aktiengesellschaft)

    AG is an abbreviation of Aktiengesellschaft, which is a German term for a public ...
  10. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability Company in Indonesia. ...
Related Articles
  1. Oil: A Big Investment With Big Tax Breaks
    Investing Basics

    Oil: A Big Investment With Big Tax Breaks

  2. Evaluating A Company's Management
    Active Trading Fundamentals

    Evaluating A Company's Management

  3. How To Analyze A Company's Financial ...
    Markets

    How To Analyze A Company's Financial ...

  4. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

  5. How To Invest In Corporate Spin-offs
    Chart Advisor

    How To Invest In Corporate Spin-offs

  6. Wall Street’s Glass Ceiling
    Professionals

    Wall Street’s Glass Ceiling

  7. Want To Sell Life Insurance? Read This ...
    Entrepreneurship

    Want To Sell Life Insurance? Read This ...

  8. Understanding The Top SEC filing forms
    Investing Basics

    Understanding The Top SEC filing forms

  9. How Does Goodwill Affect Stock Prices?
    Investing Basics

    How Does Goodwill Affect Stock Prices?

  10. How A Company Files With The SEC
    Investing Basics

    How A Company Files With The SEC

comments powered by Disqus
Hot Definitions
  1. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  2. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  3. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  4. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
  5. Balanced Investment Strategy

    A portfolio allocation and management method aimed at balancing risk and return. Such portfolios are generally divided equally between equities and fixed-income securities.
  6. Negative Carry

    A situation in which the cost of holding a security exceeds the yield earned. A negative carry situation is typically undesirable because it means the investor is losing money. An investor might, however, achieve a positive after-tax yield on a negative carry trade if the investment comes with tax advantages, as might be the case with a bond whose interest payments were nontaxable.
Trading Center