1. Facts.

Pennzoil agreed to purchase and Getty Oil agreed to sell its controlling interest in Getty
Oil. While the finishing touches were being worked out, in comes Texaco with a new and
improved bid. Getty's board of directors accepted Texaco's bid. Of course Penzoil sued.

2. Trial Court. The trial court agreed with Penzoil and really stuck it to Texaco. Among other
things it found

a. That there was a valid agreement between Pennzoil and Getty;

b. Texaco "knowingly and intentionally" interfered with this agreement;

c. Damages were assessed at over $10 billion dollars (that's with a "B").

3. Findings of the Court of Appeals. The Appellate Court agreed with the lower court's
decision. The court's major points were:

a. There was a contract between Getty Oil and Penzoil as long as the essential terms
were agreed upon.

b. The court said as long as the party has knowledge of the contract he is interfering with is
sufficient. HE NEED NOT APPRECIATE THE LEGAL SIGNIFICANCE.

c. The court said Texaco knew of the agreement between Getty Oil and Penzoil. The court
lists several factors which lead them to that decisions including:

(1) Notice of the Contract in the Wall Street Journal.

(2) Texaco's strategy to defeat Penzoil's deal by stopping the signing. AND

(3) Getty Oil's demand for full indemnity from Texaco against any claims by
Penzoil arising from their agreement.

III. Wrongful Interference with a Business Relationship.

A. Introduction. The general rule is "one can not interfere unreasonably with another's business." The key
to this section is what is unreasonable behavior?

1. The primary focus of this portion of the chapter is to distinguish between good competition and
behavior that borders on being a tort.

2. Text's Emphasis. Although there is no clear definition of what a wrongful interference with a
Business Relationship is, the text list several key points:

a. A business can not unreasonably interfere with an economic advantage gain by a

competitor through advertising

(1) The text gives an example of Store A positioning himself in front of Store B and
taking Store B's prospective customers.

b. A salesperson can not follow another company's salesperson through the city, soliciting
the same customers.

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