Texaco, Inc. v. Pennzoil Co.
Texas Court of Appeals
729 S.W.2d 768 (1987)
After Getty's board rejected Pennzoil's (plaintiff) initial offers, negotiations culminated in a board-approved second counteroffer that Pennzoil accepted, with both companies issuing press releases referencing an 'agreement in principle' while formal documents were still being drafted; Texaco (defendant), after researching Getty and meeting with its two primary shareholders (who agreed to sell to Texaco instead), made a competing offer that Getty's board accepted, withdrawing its counteroffer to Pennzoil, and a jury found Texaco liable for tortious interference with the Pennzoil-Getty contract, awarding compensatory and substantial punitive damages.
Whether someone interfering with a contract can be held liable for causing its breach when the interfering party knew of the contract's existence and actively caused the breach, and whether a party can be bound by an agreement that is not reduced to writing.