But I Didn't Sign It!
Be careful-that doesn't always mean it's not a deal.
There's a common misconception that a deal ain't a deal until everyone signs on the dotted line. This thinking is not only wrong, but also dangerous. A handshake or oral agreement is the obvious exception. But did you know that an exchange of letters or even a simple promise can legally bind you? The Pennzoil Co. v. Texaco Inc. case is the most celebrated example-and one that every dealmaker should study.
On December 28, 1983, Pennzoil offered to buy Getty Oil. Five days later, a "memorandum of agreement" was signed by Pennzoil and Getty, but Getty's board hadn't voted on it yet. Regardless, on January 4, Getty issued a press release announcing the merger, subject to the signing of a formal agreement. However, sometime between the 3rd and the 5th, Getty apparently also started talking to Texaco, because on January 6, Texaco announced that it had just bought Getty!
Continue reading this article - and everything on Entrepreneur!
Become a member to get unlimited access and support the voices you want to hear more from. Get full access to Entrepreneur for just $5.
Get 3 months free with code zendesk
Presented by Zendesk
Entrepreneur Editors' Picks
These Co-Founders Are Using 'Quiet Confidence' to Flip the Script on Cutthroat Startup Culture and Make Their Mark on a $46 Billion Industry
My 7-Year-Old Daughter Started Selling Eggs. Here's What She Taught Me About Running a Startup.
Why You Need to Become an Inclusive Leader (and How to Do It)
Career Transitions You Can Make in Your 40s and 50s
Billionaire Naveen Jain Is an Expert at Disrupting Fields He Has No Experience In. His Secret Sauce for Building Multi-Million Dollar Companies? 'You Have to Come as Naive.'
4 Principles to Develop Next-Level Leadership at Your Company
This Filipino American Founder Is Disrupting the Beverage Aisle by Introducing New Flavors to the Crowded Bubbly Water Market