Hawaiian Telephone Company entered into a contract with Microform Data Systems, Inc. (Microform), for Microform to provide a computerized assistance system that would handle 15,000 calls per hour with a one second response time and with a “nonstop” feature to allow automatic recovery from any component failure. The contract called for installation of the host computer no later than mid February of the next year. Microform was not able to meet the initial installation date, and at that time, it was determined that Microform was at least nine months away from providing a system that met contract specifications. Hawaiian Telephone canceled the contract and sued Microform for damages. Did Microform materially breach the contract? Can Hawaiian Telephone recover damages? Hawaiian Telephone Co. v. Microform Data Systems Inc., 829 F. 2d 919, 1987 U. S. App. Lexis 13425 (United States Court of Appeals for the Ninth Circuit)

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