Sha-I Corporation, a Delaware Corp., Cross-Appellant v. City and County of San Francisco, a Municipal Corp., Cross-Appellee
Opinion
Opinion
Ely, J.
The root of the present controversy is a contract between SHA-I Corporation (for merly Automated Health Systems, Inc.), a Delaware corporation with its principal place of business in Massachusetts, and the City and County of San Francisco (“the City”). The basis of federal jurisdiction is the diversity of the parties’ residency and the requisite amount of money involved.
Automated Health Systems (“AHS”) agreed to design and install a computer system at the clinical laboratory of a hospital, operated by the City, in three successive phases described as the “PDP-12 Basic System,” “PDP-12 Advanced Systems,” and the “PDP-15 System.” After installation, each system was to be subjected to a 30-day acceptance test, and if the system performed at “an effectiveness level of 95%,” as defined in the contract, the City was to accept the system and pay for it. Installation, acceptance, and payment for the PDP-12 Basic and Advanced Systems occurred in line with the terms of the contract, but the contract collapsed in its third phase. Although the PDP — 15 System was installed, the City, having decided that it was unsatisfactory, refused to pay for that installation.