Under California Business and Professions Code Section 7031, what happens if a contractor performs work without a valid license?
Correct Answer
C) The contractor cannot sue to collect payment for work performed
B&P Code Section 7031 prohibits unlicensed contractors from maintaining any action to recover compensation for work requiring a contractor's license. This is an absolute bar to recovery, regardless of the quality of work performed.
Why This Is the Correct Answer
California Business and Professions Code Section 7031 creates an absolute prohibition against unlicensed contractors recovering compensation for work that requires a contractor's license. This statute serves as a complete bar to any legal action for payment, regardless of work quality, completion, or customer satisfaction. The law is designed to protect consumers and enforce licensing requirements by removing financial incentives for unlicensed work.
Why the Other Options Are Wrong
Option B: The contractor can collect payment for materials but not labor costs
The statute makes no distinction between materials and labor costs. Section 7031 prohibits recovery of any compensation for work requiring a contractor's license, including both materials and labor. The contractor cannot collect payment for any portion of unlicensed contracting work.
Option D: The contractor can collect payment after obtaining a license within 90 days
Section 7031 provides no grace period or retroactive remedy for unlicensed work. Obtaining a license after performing work does not cure the violation or restore the right to collect payment. The prohibition is absolute and cannot be remedied by subsequent licensing.
Memory Technique
Remember 'No License = No Lawsuit = No Money' - Section 7031 creates a complete financial penalty for unlicensed contracting work.
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