What is a Gentlemen's Handshake Agreement?

What is a Gentlemen's Handshake Agreement?

The gentleman’s handshake is a commonly used phrase in agreement making, finalizing a deal, and basically is an informal agreement between one gentleman to another, to create a formalized deal. But, are the terms of these “non-written” contracts binding? What is the origination of the term? We knew the handshake had been around a long time  and wanted to breakdown gentleman’s handshake, its origination, and how it is commonly used (both today, and throughout its history).

Origination of the Handshake

Gentleman’s handshake (which also typically refers to a gentleman’s agreement, which was formalized in England), is a term used by parties (typically men) to seal a contract, agreement, or deal. The custom of handshakes began in medieval periods (when chivalry was still considered the norm); this was typically a method of one party showing the other party that they did not have any weapons on their person. The handshake during this period gave rise to tipping of the hat (or metal armor), which was a means of showing the person being met wasn’t going to attack or possibly harm the party which they were meeting/approaching.

What it was intended to do -

The gentleman’s handshake or gentleman’s agreement as it is sometimes referred to, was a way of indicating that both parties shaking hands, were engaged in a formalized agreement. It was a way of indicating that what one party was telling the other person, was that they would complete an act, or go through with a verbal agreement which both sides were aware of.

Why the handshake was common during this period -

The gentleman’s handshake became a common practice because it acted as a formalized agreement between two parties, without the cumbersome paperwork, contract negotiations, and deal making which is typically involved in deals or contracts today. It didn’t come with the cumbersome drafting of documents, expensive legal fees of lawyers drawing up contract terms, and wasn’t nearly as lengthy of a process as deal making and contract negotiation is today. The handshake was also a relied upon method of deal making and negotiations, because during the periods which it became formalized, a man’s word, actually meant something. During these periods a person’s word was more than sufficient to showcase they actually intended to follow through with a promise or agreement which was being created by two parties (or more).

From the gentleman’s handshake, came common phrases such as “let’s shake on it,” or “we have a deal.” The handshake was typically more than sufficient to enforce a contract between parties. The simple fact that people were honest, stood behind their words, and knew that their words were actually relied upon by the party which they were engaging into a contract with, gave way to using this common method of shaking hands, to indicate a contract/deal/negotiation, was relevant, was formalized, and was to be enforced by the parties which shook hands and engaged in the gentleman’s handshake.

Ties to English nobility/contracts -

The term “a gentleman’s handshake” or “gentleman’s agreement” was also commonly used by English nobility, not only during medieval periods. Kings and other royalty typically relied upon a handshake, as a means of formalizing an agreement. During the period of nobility, a handshake between parties meant a man would keep his word, and would complete the act or contract agreement which the parties spoke of. It is commonly tied to the idea that an “Englishman’s word is his bond.” This specific expression dates back to the 1500s, indicating that a gentleman’s word was equivalent to that of his bond, and in many cases, was considered greater or more relevant than his bond.

Industry agreement -

In England, the gentleman’s handshake was typically used for industry agreements. It was used between parties trying to control the pricing or price wars between companies in a particular industry or trade business. They were found in a variety of industries, and many contracts in the steel and iron industries relied upon the unspoken contract agreement which was tied to a handshake between gentlemen. International agreements, such as coordination of trade policies, have also been tied to the gentleman’s handshake throughout history. Further, many trade policies relied upon this formalized agreement between men.

Use of the Handshake Today
In modern days, and present time, the gentleman’s handshake is typically just that, a handshake. Today it is no longer viewed as a means of contract negotiations between two parties. Namely due to the fact that most people today don’t rely on the words spoken by others, and intentions change so quickly, especially in the business realm. The use of formalized contracts, written contracts, hiring lawyers, and actually having both sides meet to create a binding contract, is the manner in which business is typically run today. The fact that more often than not people change their minds, people go back on their word, and one’s word is not nearly as solid or reliable as it used to be during the times of nobility and medieval periods, we no longer rely on the gentleman’s handshake as a formalized agreement.

Although a handshake between friends may be considered an agreement or a non-written contract, today this would not be found as a legally binding contract, and would not be enforced by a court system if one party went back on their word. During the initial periods of the handshake, more often than not it was enforced as a formalized contract. The handshake may still be used today to indicate the formalization of a contract or formal agreement. However, the handshake alone does not create a binding agreement, or legally binding contract between two parties. Today we rely upon written contracts, legal experts, and signed documents between two (or more) parties, who intend to engage in a formalized agreement.

The handshake is still used today in business negotiations and contracts between parties. With this in mind, the value and significance of the handshake has been reduced to a mere showing of good faith where both parties intend to follow through with the contract terms. In today’s highly legalized field of contract negotiations and deal making, it is no longer the norm for creating a contract, and today is not legally binding when it comes to two parties agreeing upon contract terms which they would like to have enforced in a legal setting or environment.

At Artius Man we believe in the honor of a gentleman's handshake and treat each with respect and give you our word.