The Commonwealth and its political subdivisions or agencies, like private business entities, often enters contracts for goods and services with third parties.  As is sometimes the case with commercial transactions, the Commonwealth or its subdivisions may fail to honor its contractual obligations, including the obligation to pay for goods and services that it orders and receives.  The question then arises from the perspective of persons or entities who have suffered from the Commonwealth’s breach of its contractual obligations – how does one enforce a contract against the state government?

Before answering this question, one must make a brief reference to the English Common Law tradition out of which the American legal system arose, and which existed in the Commonwealth of Pennsylvania dating from before Independence and ratification of the United States Constitution.  The Common Law tradition contained a doctrine commonly referred to as “Sovereign Immunity,” or “Crown Immunity,” which held that “the king (or the State) can do no wrong,” and therefore cannot be sued for a legal wrong.  As archaic as this sounds to the modern businessperson, it remains the rule that the Commonwealth cannot commit a legal wrong, and therefore cannot be sued.  As one might have guessed, however, such a broad immunity to commit what would be legal wrongs if done by private parties carries with it a significant disadvantage in the modern era, when the Commonwealth’s activities require it to transact business with private business entities and individuals.  Not many would willingly provide goods and services to the Commonwealth in exchange for the promise of payment when there exists no means to enforce the payment term – therefore, the Commonwealth’s activities would be grossly limited by what initially seemed like a tremendous advantage. 

In large part in order to induce these private entities and individuals to contract with the Commonwealth and its subdivisions, the General Assembly has carved out certain exceptions to the Commonwealth’s Sovereign Immunity.  For claims by businesses or individuals where the Commonwealth has breached a contractual duty and money damages are sought, the General Assembly has made an exception to Sovereign Immunity and created a forum for the bringing of those claims called the “Commonwealth Board of Claims.”  Though the creation of the Board of Claims would seem to welcome claims against the Commonwealth, practice before the Board of Claims is fraught with procedural traps designed to block claims against the Commonwealth, including filing deadlines which are comparatively very short when compared to normal commercial litigation between private parties.