Provided that an oral contract satisfies any requirements imposed by law, such a requirement that contracts for a specific type of transaction be in writing, it is legally enforceable. For example, in 1984,
Getty Oil was sold to
Pennzoil in a handshake deal, a lay term for an oral contract, which was binding under New York law.
Texaco later made a higher offer, and the company was sold to Texaco. Pennzoil filed a lawsuit alleging
tortious interference with the oral contract and, after prevailing in
Pennzoil, Co. v. Texaco, Inc., was awarded $11.1 billion in damages, later reduced to $9.1 billion plus interest and penalties. In a United Kingdom case,
RCS Contractors Ltd v. Conway, the parties to an otherwise valid oral contract for construction services disagreed as to whether they had entered a single oral contract for work at three sites, or three separate contracts, one for each work site. Without a written agreement, the court had to examine other evidence to attempt to discern the intent of the parties, ultimately concluding that the parties were operating under a single contract. ==See also==