David DelCollo’s Pennsylvania Contract Cheat Sheet

» Posted by on Dec 17, 2015 in David DelCollo | Comments Off on David DelCollo’s Pennsylvania Contract Cheat Sheet

Who’s afraid of a little contract dispute? Literally every American business owner, that’s who.

Philadelphia attorney David DelCollo built the first part of his career on a solid foundation: contracts, contracts and more contracts. And he’s not sorry he did it.

“I was fortunate to be responsible for negotiating and enforcing contracts for two rather large organizations — one in the IT industry, the other in healthcare — early in my career,” says DelCollo. “Actually working in the trenches on these issues was an incredible experience that informs my work to this day.”

DelCollo is permitted to practice in the state of Pennsylvania, making him familiar with the laws on the books in that state.

Pennsylvania contract law is, frankly, quite complicated,” he says. “Our corporate legal code is a bit less business-friendly than some neighboring states, particularly Delaware.”

That means DelCollo has to be an expert in the nuances of contract law — a challenge he’s more than happy to meet. If you’re a Pennsylvania business owner, attorney or employee, you’d be wise to pick his brain. Here’s DelCollo’s Pennsylvania contract cheat sheet.

Contract Components

Anyone entering into a contract in the state of Pennsylvania, or anywhere else, needs to understand the basic components of valid contracts. According to David DelCollo, the most important are:


  • Offer: Technically speaking, an offer is any action that shows willingness to be bound by the terms of the contract. In implied contracts, such as retail transactions, the offer is made when the buyer walks up to the checkout counter with his or her shopping cart.
  • Acceptance: For a contract to be valid, it needs to be accepted by both parties. Acceptance takes many forms, often a signature, but sometimes a handshake or some sort of overt verbal agreement is valid.
  • Consideration: Consideration is synonymous with “payment,” but doesn’t always refer to a monetary transaction. “Consideration requires both parties to have ‘skin in the game,’” says DelCollo. “Otherwise, the contract is really just one party making a gift to the other, and that’s not enforceable in court.”
  • Terms: The terms of the contract outline each party’s obligations and rights, as well as the parameters of the transaction or agreement. For instance, the terms of an employment contract outline compensation, length of employment and other key parameters. Terms need to be “reasonably specific,” says DelCollo, so that they can be enforced in court.

Oral vs. Written

“Always get it in writing,” is a mantra in many corner offices. But contracts don’t actually have to be written to be enforceable. Verbal (oral) contracts can, and often do, hold up as the basis for important business agreements, even when the number of people or dollar amounts involved are quite large.

However, oral contracts come with a major drawback: they’re difficult and time consuming to enforce. “Oral contracts often give rise to a classic he-she, she-said dilemma,” says DelCollo. “When it’s one party’s word against the other, the mediator or judge charged with deciding the merits of the case needs to look to other sources for clues as to the true terms of the contract and subsequent sequence of events.”


That can get messy, fast. So maybe it’s not a bad idea to follow the “always in writing” dictum.

Breach & Recovery

A less common situation that’s worth mentioning is unjust enrichment. Unjust enrichment claims can take many forms, but they generally arise when an apparently uninvolved or tangentially involved third party benefits from the execution of a contract. For instance, if a shipper agrees to deliver goods to a particular address, accidentally drops them off at the wrong address, and the occupant of the wrong address subsequently sells them for profit, a claim may exist.

A Note About “Fairness”

Who said life was supposed to be fair? Certainly not the legal experts responsible for drawing up Pennsylvania’s contract law statutes way back when.

Under ideal circumstances, parties to a contract sign on the dotted line because they think they’re getting the best possible deal — or at least the best deal they can get under whatever circumstances brought them to the negotiating table. Of course, the reality is more complicated. Some people are poor negotiators. Others don’t lose sleep over the details of particular contracts, especially when those contracts aren’t matters of life or death.

One thing that’s well set in precedential stone is that parties to a contract can’t bring suit or claim breach simply because they deem the terms of the contract to be “unfair” at a later date.

“If I had a dime for every time a client told me they didn’t think the terms of a contract were fair, I’d be able to retire tomorrow,” laughs DelCollo.

In other words, DelCollo says, fairness doesn’t enter into the equation. As we’ve seen, there are a host of other legitimate reasons to claim that a counterparty is in breach of contract.

Expect the Unexpected

The Boy Scouts have a well-worn motto, “Always Be Prepared.” That might as well be the mantra that successful business owners live by. Without proper preparation, you’re at the mercy of forces beyond your control.

On the other hand, it’s tough to be prepared for everything that could possibly go right (or wrong) in the everyday course of business. Perhaps a better motto might be, “Expect the Unexpected — and Make Sure to Draw Up Your Contracts Accordingly.”

On second thought, that’s a bit of a mouthful. Let’s stick with “Always Be Prepared.”