Question

Texaco v. Pennzoil is a dramatic and complicated 10 billion dollar case. What statement below most succinctly describes the single most important legal issue upon which it turns?

Answer 1

Answer: A case that had to do with contract interference. Pennzoil made an unsolicited bid to buy 20 percent of Getty Oil at $112.50 per share and the Getty Board approved the agreement. Before the lawyers for both side could approve the agreement, Texaco appeared and offered Getty stockholders $128 a share for the entire company. Getty officers turned their attention to Texaco, but Pennzoil sued, claiming tortious interference. Texaco said they had not interfered because there was no binding contract.

Jury agreed with Penzoil's argument--$7.53 million in actual damages and $3 billion more in punitive damages. After appeals and frantic negotiations, the two parties reached a settlement.

Texaco agreed to pay Penzoil $3 billion as a settlement for having wrongfully interfered with Pennzoil's agreement to buy Getty.