The legal dispute began when Texaco announced its intention to purchase Getty Oil in 1984, after Pennzoil had already entered into a verbal contract with Getty. Despite not being formally signed, this agreement was deemed binding in the eyes of the law, leading to a protracted court battle. The trial unfolded in a Texas courtroom, where the jury was presented with evidence of Texaco's actions, which Pennzoil argued were intentionally deceptive. The jury ultimately sided with Pennzoil, delivering the unprecedented ruling. The case drew national attention as it underscored the complexities and stakes involved in multi-billion dollar mergers in the oil sector.

Following the verdict, Texaco's financial standing came under extreme pressure. The company announced plans to file for bankruptcy due to the immense damages awarded to Pennzoil. A settlement was eventually reached in 1988, revising the initial judgment to a lower, yet still substantial amount. This legal conflict not only highlighted the volatile nature of mergers and acquisitions but also catalyzed discussions regarding contractual law and corporate ethics, transforming how corporations approached agreements and negotiations.