N.Y. RAT Law § 42 — New York Code / Act RAT / Article 5 / Section 42
Contract for construction or operation
Status: in_force

§ 42. Contract for construction or operation.  a. Every contract for\nthe construction or operation of such road shall provide by proper\nstipulations and covenants on the part of the city, that the city shall\nsecure and assure to the contractor, so long as the contractor shall\nperform the stipulations of the contract, the right to construct or to\noperate the road as prescribed in the contract, free of all right, claim\nor other interference, whether by injunction, suit for damages or\notherwise, on the part of the owner, abutting owner, or other person.\nThe person bidding or contracting for the construction, equipment,\nmaintenance or operation of the railroad included in any such contract\nshall make such deposit of cash or securities and shall give a bond to\nsuch city, in such amount as the board of transportation shall require,\nand with sureties to be approved by such board, who shall justify each\nin double the amount of his liability upon such bond.  Such bond shall\nbe a continuing security, and shall provide for the prompt payment by\nsuch contractor, of the amount of annual rental, if any, specified in\nthe aforesaid contract, and also for the faithful performance by such\ncontractor of all the conditions, covenants and requirements specified\nand provided for in such contract. In lieu of such continuing bond such\ncontractor, upon the approval of the board of transportation, may\ndeposit with the comptroller cash equal in amount to the entire amount\nof such bond or securities which are lawful for the investment of the\nfunds of savings banks within this state and are worth not less than the\nentire amount of such bond. If such bond shall have been given then\nafter the deposit of cash and securities in lieu thereof as aforesaid,\nand the approval thereof by such board, such bond shall be surrendered\nby the city to the contractor duly canceled by the comptroller. In the\nevent of the deposit of cash or securities as aforesaid, the contract\nmay provide for the payment to the contractor of the income of such\nsecurities or of interest upon such moneys at a rate not higher than the\nhighest rate received by the city upon the deposit of its funds with\nbanks, and may also provide for withdrawal of securities so deposited\nupon deposit of cash or securities of the same value, provided that all\nsuch securities shall be such as are so lawful for the investment of the\nfunds of savings banks. The board of transportation, in or by any such\ncontract and in its discretion, may require, and the rapid transit act\nshall be deemed to have authorized the board of transportation or any of\nits predecessors to have required, prior to the sixteenth day of May,\nnineteen hundred six, any other security upon any such contract.\n  b. No contract entered into under authority of this chapter shall be\nassigned without the written consent of the board of transportation.\nSuch contractor, with such written consent and upon such terms and\nconditions as such board shall prescribe, may either assign the whole of\nsuch contract or separately the right or obligation to maintain and\noperate such road for the remainder of the term of years specified in\nsuch contract and all rights with respect to such maintenance and\noperation, or included in the leasing provisions of such contract, but\nsubject to all the terms and conditions therein stated. The assignee, in\nand by such assignment, shall assume all of the obligations of the\noriginal contractor under or with respect to such leasing provisions and\nall obligations which relate in any way to such operation and\nmaintenance. Such board before giving its consent shall be satisfied\nthat the pecuniary responsibility of the assignee shall be no less than\nthat of such original contractor. All of the security or securities\nwhich the city shall have received for the performance by the original\ncontractor of such leasing provisions and of all provisions of the\ncontract with respect to such operation and maintenance shall continue\nin full force as provided in such contract or any modification thereof,\nas security for the performance by such assignee of all obligations of\nthe contractor under or with respect to such leasing provisions and such\nmaintenance or operation.\n  c. It shall be deemed to be part of every such contract that, in case\nthe board of transportation shall cease to exist, the legislature may\nprovide what public officer of the city shall exercise the powers and\nduties belonging to such board under or by virtue of any such contract,\nand that in default of such provision, such powers and duties shall be\ndeemed to be vested in the mayor of the city. Every such contract shall\ncontain appropriate terms, conditions and provisions for safeguarding\nthe interests of the city in the event of the failure or neglect of such\ncontractor to construct, equip, maintain or operate the railroad\naccording to the terms of the contract, and such board may bring such\naction in the name and in behalf of the city as may be necessary for the\nsufficient and just protection of the rights of the city, or upon such\nterms as seem just to it, and with such person as to such board may seem\nproper, may make another operating contract and lease of such road for\nthe residue of the term of the contractor in default. Such board may\nbring action in the name and on behalf of the city to recover from the\ncontractor the amount due from the contractor, less the amount which\nshall have been received by the city, under or by virtue of such new\ncontract, and for all other damages sustained by the city by reason of\nsuch default.\n