Commonwealth Party Procurement Contract Terms Act

Pennsylvania Act 114 bars out-of-state dispute, arbitration and indemnification terms in Commonwealth procurement contracts

Pennsylvania enacted the Commonwealth Party Procurement Contract Terms Act (Senate Bill 1410) as Act No. 114 of 2026 on October 22, 2026. The act prohibits Commonwealth parties and local agencies from entering procurement contracts containing out-of-state dispute provisions, binding arbitration, non-Pennsylvania governing law or indemnification clauses. A prohibited term is void and unenforceable, and the remainder of the contract stays valid. The act takes effect December 21, 2026, and applies to contracts entered into, amended or renewed from that date.