Construction
Pennsylvania (PA)
Subcontractor Agreement

Pennsylvania Subcontractor Agreement Template | Statutory Compliant

Generate a construction subcontract tailored to Pennsylvania law — with statutory prompt payment deadlines, retainage caps, lien waiver rules, and anti-indemnification protections built in.

42 Pa. C.S. § 51101 et seq.
Prompt payment & retainage compliant
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Contract Parties

Subcontractor

Project & Schedule

Payment Terms

Total subcontract price for your scope of work.

Pennsylvania rules: Pennsylvania does not cap retainage by statute on private construction; retainage is negotiable.

Days after GC receives owner payment.

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Pennsylvania (PA)
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Subcontractor Agreement

Construction Subcontract — State of Pennsylvania

This Subcontractor Agreement (the “Agreement”) is made and entered into as of October 5, 2026 by and between [General Contractor Name] (“General Contractor”) and [Subcontractor Name] (“Subcontractor”), governed by 42 Pa. C.S. § 51101 et seq. and the laws of the State of Pennsylvania.

General Contractor

[General Contractor Name]

Subcontractor

[Subcontractor Name]

Project Owner

—

Project Address

—

Contract Price

[Contract Price]

License #

—

1. Scope of Work

Subcontractor shall furnish all labor, tools, equipment, and materials necessary to complete the agreed scope of work in a good and workmanlike manner, in compliance with all applicable building codes.

2. Payment

GC shall pay Subcontractor within 10 days after receiving payment from the Project Owner. Under 62 P.S. § 1403(a), the general contractor must pay subcontractors within 14 days after receiving payment from the owner. If the owner has not paid within 33 days of the sub’s invoice, the sub may suspend work after 30 days’ written notice, and penalty interest plus attorney fees are available.

3. Retainage

GC may withhold 10% retainage from each progress payment. Pennsylvania does not cap retainage by statute on private construction; retainage is negotiable. CASPA requires retention to be held in escrow and released promptly upon completion.

4. Lien Waivers

Pennsylvania does not require statutory lien waiver forms; waivers are enforceable if they clearly identify the project, amount, and date. Under CASPA (62 P.S. § 1403a), a waiver of lien rights is effective only to the extent of payment actually received, and pay-if-paid clauses are void.

5. Mechanics Lien Rights Preserved

Pennsylvania requires filing a lien within 90 days after the last work or materials were furnished, followed by foreclosure within 1 year of filing. Pennsylvania requires a Notice of Furnishing to be filed with the county recorder and served on the owner within 45 days after first furnishing labor or materials.

6. Indemnification

Pennsylvania under 62 P.S. § 1403a voids provisions in construction contracts requiring a subcontractor to indemnify another party for that party’s sole negligence or willful misconduct. CASPA also voids pay-if-paid clauses and requires written waivers tied to actual payment.

7. Governing Law

This Agreement is governed by the laws of the State of Pennsylvania, including 42 Pa. C.S. § 51101 et seq. (Pennsylvania Construction Law) and Prompt Pay at 62 P.S. § 1403 et seq. (for private jobs, via the Contractor and Subcontractor Payment Act - CASPA).

[General Contractor Name] — General Contractor

Print Name / Title

[Subcontractor Name] — Subcontractor

Print Name / Title

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Pennsylvania Payment & Retainage Rules

Under 62 P.S. § 1403(a), the general contractor must pay subcontractors within 14 days after receiving payment from the owner. If the owner has not paid within 33 days of the sub’s invoice, the sub may suspend work after 30 days’ written notice, and penalty interest plus attorney fees are available.

Retainage Cap

Pennsylvania does not cap retainage by statute on private construction; retainage is negotiable. CASPA requires retention to be held in escrow and released promptly upon completion.

Pay-When-Paid

Your agreement states that owner payment is a timing mechanism, not an absolute condition precedent — preserving your right to payment and statutory remedies under 42 Pa. C.S. § 51101 et seq..

Lien Waivers

Pennsylvania does not require statutory lien waiver forms; waivers are enforceable if they clearly identify the project, amount, and date. Under CASPA (62 P.S. § 1403a), a waiver of lien rights is effective only to the extent of payment actually received, and pay-if-paid clauses are void.

Your Mechanics Lien Rights in Pennsylvania

This agreement expressly preserves your right to record a mechanics lien and serve statutory preliminary notices — no pay-if-paid, pay-when-paid, or lien waiver clause in the document can waive your lien rights beyond payment actually received.

Pennsylvania requires filing a lien within 90 days after the last work or materials were furnished, followed by foreclosure within 1 year of filing.

Pennsylvania requires a Notice of Furnishing to be filed with the county recorder and served on the owner within 45 days after first furnishing labor or materials.

Deadlines matter: missing a Pennsylvania lien or notice deadline can permanently waive your security interest in the project. Calendar both dates the day you mobilize on site.

Indemnification Limits Under Pennsylvania Law

Pennsylvania under 62 P.S. § 1403a voids provisions in construction contracts requiring a subcontractor to indemnify another party for that party’s sole negligence or willful misconduct. CASPA also voids pay-if-paid clauses and requires written waivers tied to actual payment.

Pennsylvania Subcontractor Agreement FAQs

When must a general contractor pay me under Pennsylvania prompt payment law?

Under 62 P.S. § 1403(a), the general contractor must pay subcontractors within 14 days after receiving payment from the owner. If the owner has not paid within 33 days of the sub’s invoice, the sub may suspend work after 30 days’ written notice, and penalty interest plus attorney fees are available. Your subcontract should mirror these statutory deadlines so that late payments automatically trigger the statutory interest and remedies without negotiation.

How much retainage can a GC legally withhold in Pennsylvania?

Pennsylvania does not cap retainage by statute on private construction; retainage is negotiable. CASPA requires retention to be held in escrow and released promptly upon completion. Your agreement should specify the exact retainage percentage, the release schedule (typically at substantial completion and final completion), and payment of statutory interest on withheld retainage.

Are pay-if-paid clauses enforceable in Pennsylvania subcontracts?

While Pennsylvania has not enacted a blanket statutory ban on pay-if-paid clauses, courts and statutes in most states treat "pay-when-paid" as a reasonable timing provision rather than an absolute condition. Check 42 Pa. C.S. § 51101 et seq. (Pennsylvania Construction Law) and Prompt Pay at 62 P.S. § 1403 et seq. (for private jobs, via the Contractor and Subcontractor Payment Act - CASPA) for specific restrictions, and make sure your subcontract states that payment from the owner is not an absolute condition precedent to your right to be paid.

What lien waiver rules apply in Pennsylvania?

Pennsylvania does not require statutory lien waiver forms; waivers are enforceable if they clearly identify the project, amount, and date. Under CASPA (62 P.S. § 1403a), a waiver of lien rights is effective only to the extent of payment actually received, and pay-if-paid clauses are void. Never sign an unconditional waiver until payment has actually cleared your bank account, and make sure your waiver identifies the specific billing period and amounts to avoid losing lien rights on future work.

Can a Pennsylvania subcontract require me to indemnify the GC for the GC’s own negligence?

Pennsylvania under 62 P.S. § 1403a voids provisions in construction contracts requiring a subcontractor to indemnify another party for that party’s sole negligence or willful misconduct. CASPA also voids pay-if-paid clauses and requires written waivers tied to actual payment. Always read the indemnification clause carefully — even in states with anti-indemnity statutes, "broad form" indemnity for joint negligence is typically still enforceable.

How do I preserve my mechanics lien rights in Pennsylvania?

Pennsylvania requires filing a lien within 90 days after the last work or materials were furnished, followed by foreclosure within 1 year of filing. Pennsylvania requires a Notice of Furnishing to be filed with the county recorder and served on the owner within 45 days after first furnishing labor or materials. Send statutory notices by certified mail or another trackable method, keep copies of everything, and calendar the deadlines immediately upon each project’s completion.

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