What compensation does the City owe the Contractor if work is stopped without justification?

The correct answer emphasizes that if work is halted without justification, the City is responsible for reimbursing the Contractor for actual and direct costs incurred as a result of the delay. This principle is rooted in the understanding that if a Contractor is prevented from performing their duties due to factors beyond their control, they should not bear the financial burden of those delays.

The rationale for this compensation is based on fairness and accountability. It acknowledges that Contractors incur costs such as labor, materials, and overhead when undertaking a project. Therefore, in cases where work is stopped unjustifiably, providing reimbursement for these direct costs serves to protect the Contractor from financial loss while also holding the City accountable for its role in the termination of work.

The other options do not align with this principle. Stating that no compensation is provided would unfairly penalize the Contractor for circumstances outside of their control. Covering only indirect costs fails to address the immediate and tangible expenses the Contractor faces. Suggesting reimbursement of half the project costs incurred lacks a clear connection to the actual expenses and does not reflect a fair calculation based on the work performed up until the halt.