A contract executed under this chapter must require the work to be done pursuant to the plans and specifications on file in the office of the city auditor, subject to the approval of the city auditor acting for the municipality, and must provide:

1.    The governing body may suspend the work at any time for improper performance and relet the contract or order reperformance of all or any of the work improperly done.

2.    The time within which the work is to be completed.

3.    The period of time for which the work must be guaranteed or warranted.

4.    The fund from which the contract price is to be paid by the municipality.

5.    That the consideration expressed in the contract is payable only in warrants drawn on the fund described in the contract.

6.    That the municipality assumes and incurs no general liability under the contract.

7.    That the failure of the city auditor to reject work and materials which are not up to specifications and acceptance of the job by the city auditor does not release the party from liability for any failure to perform work or furnish materials in accordance with the plans and specifications.

The city auditor acting for the municipality shall supervise and inspect the work during its progress. In addition to any rights which a municipality may have under its contract for establishment and operation of part or all of a business improvement after a contract has been awarded and before contract work has been completed, a municipality may, with the consent of the other party and without advertising for bids, order additional work done by that party of the same character as that which was contracted for, whether within or without the improvement district for which the original contract was made, and upon the same terms and conditions specified in the original contract except as to time of performance, and at the same prices for the additional work; provided, that the total price payable to said party for such additional work may not exceed twenty percent of the amount estimated by the city auditor for the municipality to be payable for that character of work under the original contract.