How to navigate cultural differences and negotiate effectively with a Gentlemen’s agreement and a Letter of Intent.

The role of culture. How to use oral and written communication skills to seal a deal

Oral and written communication have often been seen as opposing modes of expression, with the former being associated with lower status and the latter with higher prestige. However, this dichotomy overlooks the complexity and diversity of both forms of communication and their social functions.

Humans are biologically predisposed to become “speakers” but not necessarily “writers”.

Writing is a relatively recent invention in human history, and many languages still exist without a written form. Oral communication is typically embedded in a social context that involves physical cues, such as facial expressions, gaze, and posture, as well as situational factors, such as place, time, and intention. These cues help guide the interpretation of speech and are essential for language acquisition from an early age.

In contrast, written communication has the advantage or disadvantage of leaving a permanent trace that can be transmitted across time and space.

“Writing requires a higher level of abstraction and formalization than speech, which can create barriers for some groups of people who are not familiar with the conventions and norms of written language.”

The Ladder of Abstraction. 1

The relationship between language and social class is often mediated by access to and mastery of writing.

Some cultures have a strong tradition of oral transmission that preserves and transmits history, law, and literature from generation to generation without relying on writing. Oral tradition can be seen as one of the main forms of education in human societies, with or without writing. Oral tradition is sometimes considered part of folklore, but it can also contain valuable insights and wisdom that are relevant for contemporary issues.

Some examples of oral traditions are the initiatory rites and rituals that date back to prehistoric times, the mythological or religious stories that were first conveyed orally before being written down, such as the Iliad and the Odyssey attributed to Homer, and the teachings of the Celtic Druids who had a significant political and social influence in ancient Europe.

Oral tradition is not static or fixed; it evolves and adapts according to the interests and needs of each generation.

The text conveyed orally can vary significantly from one version to another, revealing different perspectives and interpretations. Even when the text is written down, errors and changes can occur in each copy, resulting in “an infinity of variants” that only share a “core” element. Therefore, oral tradition cannot be reduced to a simple factual account; it also has a fictional and mythical dimension that reflects the worldview and values of a culture.

Does the law impose a form of contract ?

The laws regarding oral contracts vary from country to country.

For example, in the United States, oral contracts are verbal agreements between two parties that can be legally enforceable in a court of law. However, an oral contract is not legally enforceable unless it is provable in court and it must meet various requirements of contract formation.

In France, a verbal contract has the same legal force as a written contract, but it must be said that a written contract is often preferable to a verbal contract. In the event that a dispute arises, it is not always possible to prove a contract by testimony.

The requirements that make an oral contract binding are much the same as those for written contracts. These requirements include offer and acceptance, complete and clear terms, voluntary consent by both parties, and legal subject matter.

In order to prove a oral contract in court, it is best to have some form of written communication saved to help provide evidence of the exchange. Some types of communication that can be utilized include letters, emails, text messages, quotes, witnesses, notes made at the time of the agreement, and proof of payment such as canceled checks or transaction statements.

How to negotiate a Gentlemen’s agreement

Negotiating a commercial agreement can be challenging, especially when the partners have different expectations, interests, and goals. To avoid misunderstandings and conflicts, it is essential to communicate clearly and transparently from the start. This will help define the scope and terms of the collaboration, as well as the level of commitment and trust required from each party.

One way to achieve this is to draft a gentlemen’s agreement, an informal pact that expresses the intention of the partners to negotiate in good faith and reasonably. Unlike a formal contract, a gentlemen’s agreement is not legally binding and relies on the honor and reputation of the parties to be fulfilled. It is based on the principle of “pacta sunt servanda” ², which means that oral contracts must also be honored, but it is not enforceable in court.

A gentlemen’s agreement can be written, oral, or implied by a non-verbal gesture. It can cover various aspects of the collaboration, such as:

  • The nature and objectives of the project,
  • The duration and exclusivity of the relationship,
  • The reciprocal obligations and expectations,
  • The principles and values that guide the partnership.

A gentlemen’s agreement can be useful when the partners want to test the feasibility of a project before committing to a formal contract, or when they want to preserve flexibility and autonomy in their relationship. It can also foster a positive and cooperative atmosphere that encourages innovation and creativity.

However, a gentlemen’s agreement also has some drawbacks and risks.

It can be vague, ambiguous, or incomplete, leaving room for interpretation and disagreement. It can also be easily broken or ignored by one or both parties, without any legal consequences. Moreover, it may not protect the interests and rights of the partners in case of disputes or conflicts.

Therefore, before entering into a gentlemen’s agreement, it is important to consider the following questions:

  • How well do you know and trust your partner?
  • How complex and risky is the project?
  • How clear and specific are the terms of the agreement?
  • How will you monitor and evaluate the progress and outcomes of the collaboration?
  • How will you handle any changes or challenges that may arise?
  • How will you resolve any disputes or disagreements that may occur?

To ensure a successful negotiation of a gentlemen’s agreement, it is advisable to follow these steps:

  1. Identify your goals and interests, as well as those of your partner.
  2. Establish a rapport and build trust with your partner.
  3. Communicate openly and honestly about your expectations and concerns.
  4. Listen actively and empathetically to your partner’s perspective and feedback.
  5. Seek common ground and mutual benefit, while respecting differences and boundaries.
  6. Document the main points of the agreement in writing or verbally.
  7. Validate each step with a go/no go decision.
  8. Review and revise the agreement periodically as needed.

A gentlemen’s agreement can be a valuable tool for creating and maintaining a productive and harmonious partnership. However, it requires a high degree of professionalism, integrity, and goodwill from both parties.

If you are not sure whether a gentlemen’s agreement is appropriate for your situation, you may want to consult an expert or seek legal advice before proceeding.

How to negotiate effectively: The power of the Letter of Intent

When you want to start a negotiation process with a potential partner, customer, or supplier, you need to communicate your intentions clearly and persuasively. One way to do that is to write a letter of intent, a document that outlines the main terms and conditions of the deal you have in mind, as well as the timeline and the next steps.

A letter of intent can help you:

  • Legitimize your efforts. By sending a letter of intent, you signal to your counterpart that you are serious and committed to the negotiation. You also justify the allocation of resources and time to work on the project.
  • Protect your interests. A letter of intent can prevent misunderstandings and disputes by clarifying the scope and boundaries of the relationship. It can also safeguard your confidential information, ideas, and proposals until you sign a formal contract.

There is no standard format for a letter of intent, but here are some common elements that you should include:

  1. Demonstrate your understanding. Start by summarizing the situation and the needs of your counterpart. Show that you have done your homework and that you have a clear vision of how you can help them achieve their goals.
  2. Clarify your status. Make sure that your letter of intent does not imply a binding agreement or obligation on your part. You can do this by using phrases like “This letter of intent is intended to indicate our general interest in this project and does not constitute a formal offer or commitment on our part.” You can also list the conditions that need to be met before you can reach an agreement and use the conditional tense as much as possible.
  3. Describe the deal. Provide a brief overview of the main aspects of the deal you are proposing, such as the product or service, the price, the delivery, the payment, etc. You can also distinguish between the core principles of the project and the offer, and the details that need to be confirmed later.
  4. Specify the conditions. Indicate what are the main conditions precedent or suspensive to the deal. These are the factors that could affect or cancel the deal, such as regulatory approval, due diligence, financing, etc. You should also mention the main clauses that you want to include in the final contract, such as warranties, liabilities, indemnities, etc.
  5. Include general terms. You may also want to add some general terms that apply to the negotiation process, such as a confidentiality clause or a non-compete clause. These clauses can protect your information and your market position from being exploited by your counterpart or third parties.
  6. Set a timeline. A letter of intent can help you speed up a negotiation by resolving many issues upfront. It can also help you build trust and rapport with your counterpart by showing your willingness to cooperate and move forward. To maintain this momentum, you should include an exclusivity commitment and a projected schedule for the project development.
  7. Allocate costs. You should also state who will bear the costs of developing and negotiating the project (travel, accommodation, R&D, tests, time, etc.). This can prevent disputes and resentment later on and ensure that both parties share the risks and rewards of the deal.
  8. Ask for confirmation. Finally, you should invite your counterpart to sign and return the letter of intent as a sign of their interest and agreement with its contents.

A letter of intent is a powerful tool to frame a negotiation and pave the way for a successful deal. By following these guidelines, you can write a letter of intent that will impress your counterpart and advance your interests.

In summary, how culture and communication shape negotiation outcomes

Culture influences oral and written communication. You shall learn to use them effectively to negotiate :

  • There are similarities and differences between oral and written communication, emphasizing their richness, variety, and social roles.
  • A gentlemen’s agreement is an informal promise that shows the willingness of the partners to negotiate fairly and reasonably, and how to make one successfully.
  • A letter of intent is a document that summarizes the main aspects and conditions of the deal, and how it can help to shape a negotiation and lead to a positive outcome.

Our advices and steps for each kind of communication :

  • Be clear, concise, brief, and strong.
  • Use correct punctuation and conditional mood.
  • Listen carefully and compassionately.
  • Look for shared interests and benefits.
  • Write down and confirm each step.
  • Add general terms and conditions.
  • Establish a schedule and share costs.
  • Request confirmation.

“A gentleman’s agreement is an understanding which is based upon the trust of both parties, rather than being legally binding.”

David Ogilvy

References :

The Third Dimension. The Dichotomy Between Speech and Writing – Frontiers in Communication

Pacta sunt servanda