What Should Pennsylvania Contractors Look for Before Signing a Construction Contract?

A construction contract can set the tone for an entire project. Before signing, Pennsylvania contractors should understand exactly what they are agreeing to, how they will be paid, what happens when circumstances change, and who bears responsibility when something goes wrong. Taking time to review these provisions before work begins can help contractors avoid costly disputes and protect their interests throughout the project.

Know Exactly What Work You Are Agreeing to Perform

A contractor should never rely on a general description of the project when the contract involves significant work. The agreement should clearly identify the scope of work, materials, specifications, plans, schedule, and other performance requirements.

Ambiguous language can create disagreements over whether particular work was included in the original price. Contractors should make sure the contract matches the proposal, drawings, specifications, and other documents incorporated into the agreement.

It is also important to understand which document controls if the contract documents conflict.

Make Sure the Payment Terms Work for Your Business

Payment provisions deserve careful attention before a contractor signs. The contract should explain when invoices can be submitted, when payments are due, whether retainage applies, and what documentation must accompany an invoice.

Pennsylvania’s Contractor and Subcontractor Payment Act, 73 P.S. § 501 et seq., establishes payment requirements for covered private construction contracts. For example, when a construction contract does not establish a payment term, the statute 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.

A contractor should understand both the contract’s payment provisions and any statutory protections that may apply.

Never Treat Change Orders as an Afterthought

Construction projects rarely proceed exactly as originally planned. Design changes, unforeseen conditions, owner requests, and other issues can affect the cost and schedule.

The contract should explain how changes are authorized, priced, documented, and approved. Contractors should also be cautious about performing substantial additional work based solely on a verbal request.

For Pennsylvania home-improvement contracts covered by the Home Improvement Consumer Protection Act, 73 P.S. § 517.7, specifications generally cannot be changed without a written change order signed by the owner and contractor. The law also contains additional requirements for home-improvement contracts.

Read the Risk-Shifting Provisions Carefully

Indemnification, insurance, warranties, limitations of liability, and responsibility for damage can significantly affect a contractor’s exposure. A contractor should understand whether the agreement requires the contractor to defend or indemnify another party and whether the required insurance coverage is actually available.

These provisions can become especially important when a project involves multiple contractors, subcontractors, owners, architects, and construction managers.

Have a Plan for Delays and Disputes

Weather, material shortages, design problems, permitting issues, and other circumstances can affect a construction schedule. Before signing, contractors should determine how the agreement handles delays, extensions of time, suspension of work, and termination.

The contract should also identify the process for resolving disputes. Mediation or arbitration provisions may affect how and where a dispute is handled, while notice requirements can establish deadlines for asserting certain claims.

Sign With Confidence, Not Questions Left Unanswered

A construction contract should protect the contractor as well as establish obligations to the owner. Reviewing the agreement before signing can help identify unfavorable terms, unclear responsibilities, payment concerns, and unnecessary legal exposure while there is still an opportunity to address them.

If you are a Pennsylvania contractor preparing to enter a construction agreement, Beckley & Madden, LLC can help you evaluate the contract and understand your legal rights and obligations. Contact the firm to discuss your project and get experienced legal guidance before you put your signature on the dotted line.