Grounds for Withholding Sample Clauses
The "Grounds for Withholding" clause defines the specific circumstances under which a party may lawfully withhold payment or performance under a contract. Typically, this clause outlines conditions such as defective work, incomplete deliverables, or unresolved disputes that justify delaying payment or other obligations. For example, if a contractor fails to meet agreed-upon milestones, the client may withhold a portion of payment until the issues are resolved. The core function of this clause is to protect parties from having to fulfill their contractual obligations when the other party has not met theirs, thereby encouraging compliance and providing leverage to resolve issues.
Grounds for Withholding. In addition to the amounts County may retain as provided elsewhere in this Contract, County may withhold a sufficient amount from any payment otherwise due to Contractor as in County's good-faith determination may be necessary to protect County in the event of the following:
a. Third-party claims filed or reasonable evidence indicating probable filing of such claims;
b. Defective Work (unless Contractor has commenced and is diligently prosecuting acceptable remedial measures, or has entered into a written agreement with County regarding the performance and schedule of acceptable remedial measures);
c. Failure of Contractor to make proper payments to any of its Design Professionals, Subcontractors, or for labor, materials, or equipment;
d. Failure of Contractor to comply with any lawful or proper direction concerning the Work given by any representative of County authorized to have given such instruction;
e. Any claim or penalty asserted against County on account of a failure of Contractor, Design Professionals, Contractor, Subcontractor to comply with the provisions of Legal Requirements;
f. Any reason specified elsewhere in the Project Documents as grounds for withholding or that would legally entitle County to a set-off or recoupment.