Section 107. Claims against political subdivisions; contractor's undertaking

A contractor under a contract heretofore or hereafter made  or awarded by any political subdivision, or by  any  officer,  board  or
  agency  thereof, or of any district therein, in case any claim or notice
  of claim for injury or damage to person or property arising out of or in
  connection with the performance of such contract,  be  made  against  or
  filed  with  such  municipality  or  district therein, may file with the
  fiscal officer of such political  subdivision  or  district  therein  an
  undertaking  as  prescribed  in  this section, and thereupon such fiscal
  officer shall be authorized to make payments to such contractor pursuant
  to the terms of such contract. Such undertaking shall be  executed  with
  such sureties, in such form and for such amount as the fiscal officer of
  such  political subdivision or district therein may prescribe, and shall
  be conditioned for the payment by such contractor of any judgment  which
  may be recovered in an action brought upon such claim.