Centech Group, Inc. v. Getronicswang Co.

After Centech Group, Inc. (Centech) (plaintiff) entered into an agreement with the U.S. Navy (the Navy) to convert 55 million microfiche personnel records into digital format, it sub-contracted a portion of the work to I-NET to design and develop a data conversion system. I-NET subsequently became Getronicswang Company (defendant). Centech failed to perform according to the terms of the prime contract with the Navy. Centech entered into a memorandum of understanding (Original MOU) with I-NET which provided that I-NET would assume liability from Centech for performance of the Navy contract by either (1) a novation of the sub-contract or (2) a restructuring of the sub-contract. If the parties were unable to achieve either of the above, they agreed to work in good faith to restructure the Navy agreement to allow I-NET to become primarily responsible for the deliverables. Additionally, I-NET agreed to award over $9 million in sub-contracts to Centech over a period of years. After the parties were unable to agree to a novation or a substantial restructuring, they entered into a new MOU (Revised MOU) which expressly superseded all previous agreements and required I-NET to identify and pursue $10 million worth of project opportunities for Centech. After I-NET failed to provide Centech with the required contracting and project opportunities, Centech filed suit in federal district court against I-NET for breach of contract. The district court granted summary judgment in favor of I-NET. Centech appealed.