§ 42. Contract for construction or operation. a. Every contract for the construction or operation of such road shall provide by proper stipulations and covenants on the part of the city, that the city shall secure and assure to the contractor, so long as the contractor shall perform the stipulations of the contract, the right to construct or to operate the road as prescribed in the contract, free of all right, claim or other interference, whether by injunction, suit for damages or otherwise, on the part of the owner, abutting owner, or other person. The person bidding or contracting for the construction, equipment, maintenance or operation of the railroad included in any such contract shall make such deposit of cash or securities and shall give a bond to such city, in such amount as the board of transportation shall require, and with sureties to be approved by such board, who shall justify each in double the amount of his liability upon such bond. Such bond shall be a continuing security, and shall provide for the prompt payment by such contractor, of the amount of annual rental, if any, specified in the aforesaid contract, and also for the faithful performance by such contractor of all the conditions, covenants and requirements specified and provided for in such contract. In lieu of such continuing bond such contractor, upon the approval of the board of transportation, may deposit with the comptroller cash equal in amount to the entire amount of such bond or securities which are lawful for the investment of the funds of savings banks within this state and are worth not less than the entire amount of such bond. If such bond shall have been given then after the deposit of cash and securities in lieu thereof as aforesaid, and the approval thereof by such board, such bond shall be surrendered by the city to the contractor duly canceled by the comptroller. In the event of the deposit of cash or securities as aforesaid, the contract may provide for the payment to the contractor of the income of such securities or of interest upon such moneys at a rate not higher than the highest rate received by the city upon the deposit of its funds with banks, and may also provide for withdrawal of securities so deposited upon deposit of cash or securities of the same value, provided that all such securities shall be such as are so lawful for the investment of the funds of savings banks. The board of transportation, in or by any such contract and in its discretion, may require, and the rapid transit act shall be deemed to have authorized the board of transportation or any of its predecessors to have required, prior to the sixteenth day of May, nineteen hundred six, any other security upon any such contract.

b. No contract entered into under authority of this chapter shall be assigned without the written consent of the board of transportation. Such contractor, with such written consent and upon such terms and conditions as such board shall prescribe, may either assign the whole of such contract or separately the right or obligation to maintain and operate such road for the remainder of the term of years specified in such contract and all rights with respect to such maintenance and operation, or included in the leasing provisions of such contract, but subject to all the terms and conditions therein stated. The assignee, in and by such assignment, shall assume all of the obligations of the original contractor under or with respect to such leasing provisions and all obligations which relate in any way to such operation and maintenance. Such board before giving its consent shall be satisfied that the pecuniary responsibility of the assignee shall be no less than that of such original contractor. All of the security or securities which the city shall have received for the performance by the original contractor of such leasing provisions and of all provisions of the contract with respect to such operation and maintenance shall continue in full force as provided in such contract or any modification thereof, as security for the performance by such assignee of all obligations of the contractor under or with respect to such leasing provisions and such maintenance or operation.

c. It shall be deemed to be part of every such contract that, in case the board of transportation shall cease to exist, the legislature may provide what public officer of the city shall exercise the powers and duties belonging to such board under or by virtue of any such contract, and that in default of such provision, such powers and duties shall be deemed to be vested in the mayor of the city. Every such contract shall contain appropriate terms, conditions and provisions for safeguarding the interests of the city in the event of the failure or neglect of such contractor to construct, equip, maintain or operate the railroad according to the terms of the contract, and such board may bring such action in the name and in behalf of the city as may be necessary for the sufficient and just protection of the rights of the city, or upon such terms as seem just to it, and with such person as to such board may seem proper, may make another operating contract and lease of such road for the residue of the term of the contractor in default. Such board may bring action in the name and on behalf of the city to recover from the contractor the amount due from the contractor, less the amount which shall have been received by the city, under or by virtue of such new contract, and for all other damages sustained by the city by reason of such default.