Common Construction Contract Disputes in Pennsylvania and How to Prevent Them

Construction projects involve numerous moving parts, and even a carefully planned project can encounter disagreements. When owners, contractors, subcontractors, architects, or suppliers disagree about their contractual obligations, a relatively small issue can quickly become an expensive construction dispute. Understanding common construction contract disputes in Pennsylvania can help businesses identify potential problems early and take steps to prevent them.

Payment Disputes Can Put a Project on Hold

Disagreements over payment are among the most common problems on construction projects. An owner may believe work is incomplete or defective, while a contractor may believe an invoice is fully earned. Contractors and subcontractors may also face disagreements about retainage, progress payments, or whether additional work qualifies for payment.

Pennsylvania’s Contractor and Subcontractor Payment Act, 73 P.S. § 501 et seq., establishes payment requirements for covered private construction contracts. For example, when the contract does not establish payment terms, the Act generally provides that interim and final invoices are due 20 days after the end of the billing period or delivery of the invoice, whichever is later.

Clear payment provisions and detailed invoices can help prevent confusion before it develops into a larger dispute.

Scope of Work and Change Orders Can Create Confusion

A construction contract should leave little doubt about what work is included in the original price. Disputes can arise when plans change, unforeseen conditions appear, or an owner requests additional work.

A strong contract should explain how change orders are requested, approved, priced, and documented. Contractors should also keep written records of owner requests and avoid relying solely on informal conversations when additional costs or time are involved.

For residential home-improvement contracts covered by Pennsylvania’s Home Improvement Consumer Protection Act, 73 P.S. § 517.7, specifications cannot be changed without a written change order signed by the owner and contractor.

Delays and Project Deadlines Can Lead to Claims

Weather, material shortages, design changes, permitting problems, and other unexpected circumstances can affect a construction schedule. If a contract does not clearly address extensions of time and responsibility for delays, the parties may disagree about who should absorb additional costs.

Contracts should identify important deadlines and explain how delays are handled. Contractors should also provide required notices promptly when circumstances affect the schedule.

Defective Work Can Become a Major Contract Dispute

Owners may claim that completed work does not meet contractual specifications, while contractors may disagree about the alleged deficiency or the cost of correcting it. Detailed plans, specifications, inspection records, photographs, and written communications can become valuable evidence.

Defining quality standards and procedures for addressing alleged deficiencies before construction begins can make disagreements easier to resolve.

Don’t Let a Construction Dispute Outlive the Project

A contract dispute does not necessarily have to end in litigation. Negotiation, mediation, arbitration, or other procedures may provide ways to resolve disagreements depending on the contract and circumstances. However, businesses should pay attention to contractual notice requirements and applicable legal deadlines. Under 42 Pa.C.S. § 5525, many actions involving construction contracts are subject to a four-year limitation period, although different claims may have different deadlines.

Build Your Best Defense Before the First Dispute Arises

Strong construction contracts do more than describe the work. They establish expectations for payment, changes, delays, performance, documentation, and dispute resolution. Addressing these issues before construction begins can help Pennsylvania businesses avoid unnecessary conflict and protect their interests if a disagreement does arise.

If you are facing a construction contract dispute in Pennsylvania, Beckley & Madden, LLC can help you evaluate the agreement, understand your rights, and determine an appropriate course of action. Contact the firm to discuss your construction matter with an experienced Pennsylvania construction attorney before a contract disagreement becomes a larger business problem.