What can the City do if the Contractor fails to meet its obligations?

The option stating that the City may withhold payments until the contractor's performance is cured is correct because it reflects a common practice in contractual agreements. When a contractor does not fulfill their obligations as specified, the City has the right to hold off on making further payments until the contractor addresses and rectifies the issues at hand. This approach serves to protect the City's interests and ensures that the contractor is motivated to correct their failures before receiving additional compensation.

Withholding payments acts as a financial incentive for the contractor to comply with the terms of the agreement, encouraging timely and satisfactory performance. It also allows the City to mitigate potential losses that could occur if payments were made before the contractor resolved their shortcomings. This practice is often documented in contracts to safeguard the project’s integrity and ensure accountability from the contractor.

The other options, while they may present possible responses a city could take, do not align with the common procedural practices outlined in contractor agreements. For instance, immediate termination of the agreement could be viewed as a drastic measure depending on the severity of the failure. Similarly, demanding a refund of previous payments could complicate the relationship between the contractor and the city, and continuing to make payments without addressing performance failures typically contradicts the principle of holding contractors accountable for their obligations