On March 1, a computer programming company orally agreed with a department store to write a set of programs for the department store's computer and to coordinate the programs with the department store's billing methods. A subsequent memo, signed by both parties, provided in its entirety:
The department store will pay the computer programming company $20,000 in two equal installments within one month of completion if the computer programming company is successful in shortening by one-half the processing time for the financial transactions now handled on the department store's Zenon 747 computer; the computer programming company to complete by July 1. This agreement may be amended only by a signed writing.
On June 6, the computer programming company demanded $10,000, saying the job was one-half done. After the department store denied liability, the parties orally agreed that the department store should deposit $20,000 in escrow, pending completion to the satisfaction of the department store's computer systems manager. The escrow deposit was thereupon made. On July 5, the computer programming company completed the programs, having used an amount of time in which it could have earned $18,000 had it devoted that time to other jobs. Tests by the computer programming company and the department store's computer systems manager then showed that the computer programs, not being perfectly coordinated with the department store's billing methods, cut processing time by only 47 percent. They would, however, save the department store $12,000 a year. Further, if the department store would spend $5,000 to change its invoice preparation methods, as recommended by the computer programming company, the programs would cut processing time by a total of 58 percent, saving the department store another $8,000 a year. The department store's computer systems manager refused in good faith to certify satisfactory completion. The department store requested the escrow agent to return the $20,000 and asserted that nothing was owed to the computer programming company even though the department store continued to use the programs.
Assume that the computer programming company's delay in completion did not give the department store the right to renounce the contract and that the parties' escrow agreement was enforceable. Is the computer programming company entitled to recover damages for breach of the contract?
A. Yes, because the computer programming company had substantially performed.
B. Yes, because the program would save the department store $12,000 a year.
C. No, because shortening the processing time by one-half was an express condition subsequent.
D. No, because the department store's computer systems manager did not certify satisfactory completion of the programs.
in case you are wondering, correct answer is D