Baron:
Oh if you break treaties etc there is DEFINATELY a penalty.

What I was refering to was when Race 'x' comes and tells you to break a treaty with Race 'y'. You agree to do so, but then dont actually go through and break the treaty. A few turns late, Race 'X' simply asks again. And the REALLY twisted thing is you get the GOOD modifier for 'agree with demand'. That is a definately problem IMO. Not only is there no penalty for reneging on a deal, there is a BENEFIT.
Now perhaps I am reading the file incorrectly (its a bit cryptic at times), but from what it appears and from game experience, thats the way it works out. And I have yet to see an AI go more unfriendly from simply ignoring their requests. If you refuse a Treaty or request directly you can see their happiness decrease instantly next turn. If you simply dont respond to the message, there is usually little or no change...although once in a while the 'default decrease/turn' kicks in and their happiness with you INCREASE. Its very odd.
Talenn