Withholding Payments to Contractor. The Owner may withhold payment of some or all of any progress or final payment that would otherwise be due if the Owner determines, in its discretion, that the Work has not been performed in accordance with the Contract Documents. The Owner may use these funds to pay replacement or substitute contractors to complete unfinished or defective Work. The Owner may withhold payment of some or all of any progress or final payment that would otherwise be due if the Owner determines, in its discretion, that it is necessary and proper to provide an additional source of funds to pay claims for which the Owner is entitled to indemnification from Contractor under the Contract Documents. Amounts withheld under this section shall be in addition to any retainage.
Withholding Payments to Contractor. Landlord and/or Tenant shall have the right to withhold all or a portion of any progress or the final payment due Contractor (i) if Contractor does not supply the documentation in support of its progress payment or final payment application required by this Construction Contract, (ii) if Contractor, by any act or omission, is responsible for any damage to its own or any other work in the construction of the Project or to any real or personal property of Landlord, Tenant, or others, (iii) if Contractor's Work on the Project is defective or deficient in any manner and Contractor has not remedied such defect or deficiency as instructed by Architect, (iv) if Contractor shall fail to remove and have released any mechanic's lien or stop notice on the real property on which Contractor performed its Work which is asserted by one of Contractor's subcontractors, equipment suppliers, and materialmen, or (v) if Contractor owes an indemnity obligation pursuant to this Construction Contract, unless the Contractor's insurance carrier has agreed to provide insurance coverage therefor without a reservation of rights. SECTION ______ CONTRACTOR SHALL PQY FOR LABOR AND MATERIALS. Contractor shall pay for all materials and labor used in or in connection with its performance of the Work through the period covered by previous payments received from Landlord or Tenant and shall furnish satisfactory evidence, whenever requested by Landlord or Tenant, to verify any and all such payments. All sums received by Contractor under this Contract shall be received in trust for the express purpose of paying in full for all labor and materials for the performance of this Contract. No title to any payment, or part thereof, shall vest in Contractor or be used for any other purpose until Contractor has first paid in full for all labor and materials supplied to Contractor and incorporated in this project.
