When Does CASPA Apply? Pennsylvania Court Clarifies Contractors’ Rights

Owners, contractors and subcontractors will want to take note of a significant Pennsylvania decision concerning contractors’ rights to recover under the Contractor and Subcontractor Payment Act (CASPA) when the entire contract is not performed, along with anticipatory repudiation by owners.

CASPA is a remedial statute applying to private projects in Pennsylvania, enacted to protect contractors and subcontractors and encourage fair dealing on construction projects. The statute entitles contractors and subcontractors to payment from the party they contracted with, provided they perform in accordance with their contract. 73 P.S. § 504. In addition to payment of the contract balance, the statute allows for recovery of interest, penalties, attorney’s fees and costs.

Actual Field Work and Full Performance are Not Required for CASPA to Apply

In Tedesco Excavating & Paving, Inc. v. FWH Development, LLC, 356 A.3d 219 (Pa. Super. Ct. 2026), the Superior Court affirmed an award of statutory interest, costs and attorney’s fees in favor of the contractor, Tedesco, even though the contractor did not have the opportunity to actually perform any work at the project site. After winning the bid, Tedesco immediately engaged an electrical subcontractor, procured equipment, prepared and submitted shop drawings and secured insurance. The project ultimately did not commence as scheduled in 2015 due to funding issues; however, it was not canceled or immediately suspended, and Tedesco remained under contract with the owner. In 2018, the owner requested an escalation proposal for price increases from Tedesco. Then, in 2019, Tedesco learned that the owner had awarded a contract for the same work to another contractor and did not intend to honor its contract with Tedesco. Tedesco sued for breach of contract, seeking anticipated overhead and lost profits. Tedesco was awarded its overhead and lost profits at trial and was also awarded interest, costs and attorney’s fees under CASPA.

The owner filed an appeal arguing that, because it had paid Tedesco for all work Tedesco performed, CASPA did not apply. The court affirmed the award to Tedesco—emphasizing that nothing in CASPA required performance of physical work or full performance of the work set forth in the contract. It also concluded that because with owner materially breached the contract, “whatever work Tedesco previously performed under the contract instantly became ‘full performance.’” In effect, the owner’s anticipatory repudiation terminated any remaining contractual obligations of Tedesco. The court emphasized that this was exactly the type of conduct CASPA was enacted to avoid and, without this application, there would be nothing to discourage owners from reneging on contracts and subsequently litigating a contractor to death.

There was a dissent to this decision—which argued that CASPA does not apply to a claim for wrongful termination resulting in lost profits. The dissent opined that the award of CASPA interest, attorney’s fees and costs was in error because Tedesco sought damages for anticipated profits, as opposed to work actually performed. This dissent sets the stage for continuing development and clarity as to when contractors and subcontractors can invoke CASPA’s protections.

Takeaways

• Contractors and subcontractors are not required to carry their work out to completion. If you are wrongfully prevented from completing contract work, CASPA will still apply.
• If you are an owner or general contractor terminating a contract, you should be careful to act in accordance with the contract and law and should not assume that potential damages are capped at the value of the work the contractor performed.
• With major amendments to CASPA signed less than 10 years ago, there are many novel situations, and the law continues to develop regarding when CASPA does not apply. If unique circumstances arise, you should not immediately assume that the statute is or is not applicable.

If you have any questions about CASPA and how it applies to you, reach out to Cohen Seglias’ Construction Group.