This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Retainer - Section 21. The City will retain ten per cent of the entire cost of the work done by the Contractor for the above guarantee period of years from the date of the approval by the Director of Public Service of the Engineer's certificate of "Total Cost." If the Contractor shall have complied with all the requirements of his contract in keeping said street in good and proper repair, then at the end of each six months, upon order of the Director of Public Service, the Contractor shall receive interest at the rate of three per cent per annum on the amount so retained from date of the investment of such amount retained, in interest bearing bonds; but if the Contractor shall fail to make all necessary repairs, as indicated by said Director, at any time during the above period, then the Director shall have power to expend all or such part of any interest that may be or may become due to said Contractor; and if such interest is insufficient, to expend all or such part of the amounts so retained as the said Director may see fit, and apply the same to making the necessary repairs, and the interest shall thereafter be allowed to the Contractor upon the residue only of the retained percentage remaining to his credit. Should the amount retained not be sufficient to make the required repairs, the Contractor shall at once make good the deficiency. At the expiration of the guarantee period, as above specified, whatever remains. to the credit of the Contractor, provided all repairs shall have been made satisfactory to the said Director, shall be paid to the Contractor.
Modification of Contract - Section 22. The Director of Public Service may, when deemed necessary, make alterations and modifications in the specifications and plans for the work, or may omit from the work covered by this contract any portion thereof, or may order extra work done; the price to be paid for the work under such altered and modified contract shall be agreed upon in writing, endorsed upon the original contract, and signed by both parties to this contract; the entire cost of the work, however, shall not exceed the estimated cost stated in the Resolution by the City Council for this improvement. And it is expressly agreed and understood that such alterations, additions, modifications or omissions shall not in any way violate or annul said contract, and the Contractor hereby agrees not to claim or bring suit for any damages, whether for loss of profits or otherwise, on account of these changes. Whenever, during the progress of the work, any additional work, or change, or modification in the work contracted for, is agreed upon as aforesaid, such additional work or addition or modification, shall be considered and treated as though originally contracted for, and shall be subject to all the terms, conditions and provisions of the original contract.
Delayed Work - Section 23. In case the Contractor fails to furnish materials or execute the work in accordance with the plans and specifications, or fails to proceed with the same as rapidly as the Director of Public Service deems it necessary to enable the Contractor to complete the work within the specified time, then and in either such case, upon ten days' written notice to the Contractor, the City shall have the right to annul and determine the contract, and to enter upon and take possession of the work. And if the contract be thus determined, the decision of the Director of Public Service shall be conclusive, and the Contractor shall not be entitled to claim or receive any damage for not being allowed to proceed. In such case, also, the Director of Public Service shall at once cause the work already done under the contract to be measured. Ten per cent of the value of the amount thus shown shall be set aside for the retainer under the provisions hereof. And the Director shall, after advertising once a week for two weeks, relet the work remaining undone. If the cost of the work done under such reletting exceed what it would have cost done under this contract, such increased cost shall be paid from any money on hand for work done under this contract other than the ten per cent retained, and if that be not sufficient, then by the Contractor and the sureties on his bond hereunder. There shall also be paid, in like manner, all costs and expense of reletting the work and damages resulting from the non-completion of the work within the specified time. If when the work is finished under such reletting it be found that there is any money due said Contractor, it shall be paid him; but in no case shall any money be due or payable to the Contractor under this contract after the contract is annulled until the work is completed and accepted and all claims and suits by reason of said work have been finally settled. The retained ten per cent shall be held for the full guarantee period as specified in Sections 20 and 21, and used, as provided in other provisions hereof, for keeping in repair so much of the work as was done under this contract. The Contractor under such reletting will be required to keep in repair the work done by him.
Injunctions - Section 24. If legal obstructions to the prosecution of the work arise, the delay shall operate to extend the time for the completion of the part or parts of the work obstructed for the length of time the obstruction continues and no longer, but no damages shall be claimed or allowed the Contractor for any such delay.
Cleaning up - Section 25. As fast as the pavement is laid, all rubbish and surplus material which may accumulate during the work herein provided for shall be removed from the roadway, sidewalks and intersecting streets by the Contractor, and such completed portion of the street left clean and in good condition.
Before final acceptance the Contractor shall clean the pavement, gutters and crossings in a thorough and effective manner by sweeping and scraping as ordered.
Measurements - Section 26. No extra or customary measurements of any kind, unless specially noted, will be allowed in measuring the work under these specifications; the actual length, area, solid contents, or number only shall be considered. In measuring pavement areas, however, individual obstructions having a surface area less than one-half (1/2) square yard shall not be deducted; the area of street car rails shall be deducted.
The measurements of the City as to the amount of work done shall be final and conclusive.
Prices - Section 27. The City shall pay and the Contractor shall receive the prices herein stipulated as full compensation for everything furnished and done by the Contractor under this contract, including all incidental1 work required but not specifically mentioned, and also for all loss or damage arising out of the nature of the work aforesaid, or from the action of the weather, floods, or from any unforeseen obstruction or difficulty encountered in the prosecution of the work, and for all risks of every description connected with the work, and for all expenses incurred by or in consequence of the suspension or discontinuance of the work, as herein specified, and for well and faithfully completing the work, and the whole thereof, as herein provided, together with remedying all defects developing during the period for which the work is guaranteed.
Partial Payments - Section 28. The Engineer shall, from time to time, as the work progresses, but not oftener than once a month, make in writing an estimate, such as in his opinion shall be just and fair, of the amount and value of the work done and materials incorporated in the work by the Contractor in the performance of this contract. On the basis of this estimate, the City shall pay the Contractor an amount equivalent to ------ per cent of the value at contract prices of work so completed.
Estimates may at any time be withheld or reduced if, in the opinion of the Director of Public Service, the work is not proceeding in accordance with the provisions of this contract.
Final Payment - Section 29. The Engineer shall, as soon as practicable after the completion of this contract, prepare a statement of the total cost of the work done hereunder, and the City shall, ninety days after the approval of such total cost statement by the Director of Public Service, pay the entire sum so found to be due hereunder, after deducting therefrom all previous payments and all amounts to be kept and all amounts to be retained, under the provisions of this contract; all prior partial estimates and payments shall be subject to correction in the statement of "Total Cost."
No Estoppel - Section 30. The City shall not be precluded or estopped by any return or certificate made or given by it, from, at any time, either before or after the final completion and acceptance of the work and payment therefor pursuant to any such return or certificate, showing the true and correct amount and character of the work done and materials furnished by the Contractor or any other person under this agreement, or from showing at any time that any such return or certificate is untrue and incorrect or improperly made in any particular, or that the work and materials, or any part thereof, do not in fact conform to the specifications; and the City shall not be precluded or estopped, notwithstanding any such return or certificate and payment in accordance there-with, from demanding and recovering from the Contractor such damages as it may sustain by reason of his failure to comply with the specifications.
Neither the acceptance by the City, nor any order, measurement, or certificate, by the City, nor any order for payment of money, nor any payment for, nor acceptance of the whole or any part of the work by the City, nor any extension of time, nor any possession taken by the City, or its employees, shall operate as a waiver of any portion of this contract or of any power herein reserved to the City, or any rights to damages herein provided; nor shall any waiver of any breach of this contract be held to be a waiver of any other or subsequent breach.
Last Payment to Terminate Liability of City - Section 31. No person or corporation, other than the signer of this contract as Contractor, has now any interest hereunder, and no claim shall be made or be valid, and neither the City nor its agents shall be liable for, or be held to pay any money, except as provided in Section 21-27-28-29. The acceptance by the Contractor of the last payment made as aforesaid shall operate as, and shall be a release to the City and agents thereof, from all claim and liability to the Contractor for anything done or furnished for, or relating to the work, or for any act or neglect of the City or of any person relating to or affecting the work, except the claim against the City for the remainder, if any there be, of the amount kept or retained as provided in Section 21.