Question:
Imperial Brass Ltd. wanted to computerize all of its systems. Jacob Electric Systems Ltd. presented Imperial with a proposal that met Imperial’s needs. In August, Imperial accepted the proposal, along with Jacob’s “tentative” schedule for implementation, which led Imperial to expect a total computerized operation by mid-January, with the possibility of a 30-day extension. In October, it became clear that there were problems with the software being developed, and Imperial asked for corrections to be made. At the end of October, the hardware and two software programs were delivered to Imperial, and Imperial’s employees attempted to begin to use the programs. Very little training was provided, however, and there were major problems with the computer screens freezing, and data being lost. More programs were delivered in January, along with some operating instructions, but Imperial’s employees were still unable to make any use of the programs they had. The programmer Jacob assigned to Imperial’s contract, Mr. Sharma, continued to work on the remaining programs. In May, however, Jacob informed Imperial that Sharma would be leaving the company, and Imperial informed Jacob that if that were to happen, given the problems and delays the company had already experienced, Imperial would be forced to end the contract with Jacob. Is the breach by Jacob serious enough to permit the innocent party, Imperial, to treat the contract as at an end?