What Is a Silent Agreement in Negotiations?

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Two businessmen shaking hands in hallway
Two businessmen shaking hands in hallway (Image: Mike Watson Images/moodboard/Getty Images)

In modern negotiations, silent agreements exist when neither objections nor explicit approvals are vocalized in negotiations where objections are possible. Silent agreements do not necessarily have full weight in determining rights for class arbitration.

Definitions

Silent agreements are either agreements that have been reached out of the public eye and are subsequently put forth as compromises from both parties or, more commonly, a lack of protestation from the opposite party that implies that they agree with the proposed position.

Usefulness

Although silent agreements can serve as the basis for furthering negotiations, they also are subject to attack if the explicit terms of the agreement are not codified over the course of the negotiations.

History

The only time that the Supreme Court of the United States has discussed silent agreements in recent history was in the case of Stolt-Nielsen S.A. v. AnimalFeeds International Corp. The court found that silent agreements between parties do not necessarily allow for later class arbitration unless there is a contractual basis for said arbitration.

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