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Section 9201 Of Chapter 9. Claims And Disputes From California Public Contract Code >> Division 2. >> Part 1. >> Chapter 9.

9201
. (a) A public entity shall have full authority to compromise or otherwise settle any claim relating to a contract at any time.
  (b) The public entity shall include provisions in a public works contract for timely notification of the contractor of the receipt of any third-party claim, relating to the contract.
  (c) The public entity shall be entitled to recover its reasonable costs incurred in providing the notification required by subdivision (b).