Although agreements between individuals often create legally binding obligations, reciprocal commitments may not be legally binding. Sometimes referred to as „gentlemen`s agreements,“ the parties may respect them because moral obligations require compliance or because future relationships will be more difficult if the current agreement is broken. International organizations may also need such informal agreements to maintain member satisfaction. Gentlemen`s agreements were a widespread discriminatory tactic, which would have been more common than restrictive alliances to maintain the homogeneity of upper-class neighborhoods and suburbs in the United States.  The nature of these agreements made it extremely difficult to prove or follow them, and they were long after the U.S. Supreme Court decisions in Shelley/. Kraemer and Barrows v. Jackson.  A source indicates that the gentlemen`s agreements are „probably still in place“ but that their use has declined sharply.  This, in some cases, led to gentlemen`s agreements in which Wall Street financiers, such as J.P. Morgan and his „House of Morgan“, would meet with the bureau to obtain prior authorization for mergers and acquisitions. One such example was the gentlemen`s agreement in which regulators and the president ignored the Sherman Antitrust Act, which allowed united States Steel Corp. to become the world`s first multi-billion-dollar company.
In English contract law, for it to be binding, an agreement must have the intention of establishing legal relations; but in commercial transactions (i.e. agreements that do not exist between family members or friends), there is a legal presumption of „intent to establish legal relations“. In the 1925 case of Rose and Frank Co. v. JR Crompton – Bros Ltd., however, the House of Lords found that the phrase “ „This regulation is not … a formal or legal agreement … is only a record of the parties` intention „was sufficient to rebut this presumption.  Gentlemen`s agreements have often been concluded in international trade and international relations, as well as in most industries. Gentlemen`s agreements were particularly prevalent at the birth of the industrial era and well beyond the first half of the 200th year, as regulations often delayed new business practices. It was found that such agreements were used, among other things, to control prices and limit competition in the steel, iron, water and tobacco industries. These examples are automatically selected from different online sources of information to reflect the current use of the word „gentleman`s Agreement.“ The opinions expressed in the examples do not reflect the views of Merriam-Webster or its publishers.