A homeowner contracts for a $75,000 addition. The contractor abandons the project after receiving $15,000. Under Tennessee law, what is the homeowner's primary recourse?
Correct Answer
B) Claim against contractor's bond
Tennessee requires contractors to maintain surety bonds, and homeowners can make claims against these bonds for contractor defaults or abandonment.
Why This Is the Correct Answer
Tennessee law requires licensed contractors to maintain surety bonds precisely to protect consumers from situations like abandonment. The bond is the primary recourse because it is specifically designed to cover contractor default and provides a direct financial remedy without requiring the homeowner to locate and sue an individual.
Why the Other Options Are Wrong
Option A: Report to local building department
Reporting to the local building department addresses code compliance and permit violations, not financial recovery for abandoned work. The building department has no authority to compel repayment of funds.
Option C: Sue in small claims court only
Small claims court has jurisdictional dollar limits (typically far below $15,000 in most Tennessee counties) and does not provide faster or more guaranteed recovery than a bond claim. It is not the primary recourse under Tennessee contractor law.
Option D: File complaint with Better Business Bureau
The Better Business Bureau is a private, voluntary organization with no legal authority to compel payment or impose penalties. Filing a complaint there may damage the contractor's reputation but does not provide financial recourse.
Memory Technique
Bond = safety net. When a contractor falls (abandons), the bond catches the homeowner. Tennessee requires the net to be there before work starts.
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