Under what condition can the indemnity obligation of the contractor be voided?

The indemnity obligation of the contractor can be voided if the loss occurs due to the City's active negligence or willful misconduct. This concept is rooted in the principle that a party should not be held responsible for losses that arise from the negligence or intentional wrongdoing of another party. In this scenario, if the City is found to be actively negligent, meaning that they were not just passively failing to meet a standard of care but were actively engaged in conduct that led to the loss, or if they engaged in willful misconduct, then the contractor should not be liable for indemnifying the City for those losses.

This principle promotes fairness and ensures that parties are only responsible for the outcomes that stem from their own actions or inactions rather than those that are a direct result of the wrongful deeds of another party. It creates a balance of responsibility and protects the contractor from being unfairly burdened by losses that are not within their control.