Common use of Grounds for Withholding Payment Clause in Contracts

Grounds for Withholding Payment. Contractor may reduce or withhold payments, in whole or in part, reject a Subcontractor payment application, nullify a previously approved Subcontractor payment application, in whole or in part, to the extent necessary to protect Contractor from loss, including costs and actual attorney's and consultant fees, and litigation costs, on account of (1) defective work not remedied; (2) claims filed or reasonable evidence indicating probable filing of claim; (3) failure of Subcontractor to make payments properly to its subcontractors or for material, labor or fringe benefits; (4) a reasonable doubt that this Agreement can be completed for the balance then unpaid; (5) damage to another subcontractor; (6) penalties assessed against Contractor or Subcontractor for failure of Subcontractor to comply with state, federal or local laws and regulations; or (7) any other ground for withholding payment allowed by state or federal law, or as otherwise provided in this Agreement. When the above matters are rectified, such amounts as then due and owing shall be paid or credited to Subcontractor. In addition, and without limiting any of its other rights and remedies, Contractor shall be entitled to withhold and to setoff against any amounts owed to Subcontractor any liabilities or amounts owed to Contractor by Subcontractor (including, to the extent permitted by law, those that relate to or arise from other projects); Subcontractor agrees to and accepts any such setoff as full payment under this Agreement and for purposes of mechanics’ lien, stop payment notice, and bond statutes and remedies.