What happens to the City's payment obligation under this Agreement upon termination?

The correct answer is that the obligation survives termination of the Agreement. This means that even after the agreement is ended, any payment obligations that were established prior to termination are still valid and must be fulfilled. This survival clause is important because it ensures that any dues for services rendered or commitments made before the termination are honored, protecting the interests of the parties involved, particularly the contractor. It allows for accountability and ensures that all financial transactions that occurred during the life of the contract will be completed according to the originally established terms, regardless of the contract's status at the time of termination.

Other options don't align with the typical legal understanding of contract termination. Immediate cessation of the payment obligation contradicts the well-accepted principle that obligations incurred during the contract must be satisfied, even if the contract itself has ended. Extending obligations for a year post-termination or stating that the City is not liable for payments post-termination also fail to recognize the importance of fulfilling any outstanding duties that were active during the contract's life. The survival of obligations is a standard practice in contract law, ensuring continuous accountability for both parties.