Can an unlicensed contractor file suit for unpaid work?

01/02/2009 - Contractors - State: AZ #14904

Full Question:

I hired a man who has a side construction business to do work on my house. The job was delayed by over 2 months, which kept me from having tenants move into the house. It was also shoddy work, so I kicked him out of the house and had to have someone else come in to fix part of the work and have them finish what was started. The contractor is now suing me for payment and I am refusing to pay for the labor. I did pay for materials up front. I know in Arizona, you must be a licensed contractor to sue for payment, so is this the case in Indiana as well? The man is not a licensed contractor, so I'm wondering if I can have the case dismissed due to this fact or what my options might be?

Answer:

According to the National Contractor License Service, Indiana does not issue state-level contractor licenses, except for plumbing contractors. You may wish to check with the applicable local municipality to see if a license is required. The following are Indiana statutes pertaining to Lake and Porter counties:

IC 22-11-3.1-1 As used in this chapter, "contractor" means any person,....

As used in this chapter, "contractor" means any person, except a licensed architect or registered professional engineer, who in any capacity other than as the employee of another for wages as the sole compensation, undertakes to construct, alter, repair, move, wreck, or demolish any structure. The term includes a subcontractor or specialty contractor, but does not include a person who furnishes materials or supplies.

IC 22-11-3.1-2 (a) A contractor doing work, other than work for a political....

(a) A contractor doing work, other than work for a political subdivision, in a county having a population of:
(1) more than four hundred thousand (400,000), but less than seven hundred thousand (700,000); or
(2) more than one hundred forty-five thousand (145,000) but less than one hundred forty-eight thousand (148,000); must obtain a unified license bond as provided in this chapter. This unified license bond is in lieu of any other bond for this type of work required by the county or a city or town within that county, and the bond must be in an amount equal to five thousand dollars ($5,000).
(b) The unified license bond shall be held for compliance with the ordinances and regulations governing business in the county, or a city or town within that county. The unified license bond required by this chapter shall be filed with the county recorder.

IC 22-11-3.1-4 A license issued by a county having a unified license bond....

A license issued by a county having a unified license bond or a city or town within that county is valid until the contractor to whom the license was issued fails to perform any work under that license for a period of five (5) years, in which case the license expires. This section does not prohibit a county, or a city or town within that county, having a unified license bond from requiring an annual renewal fee in accordance with section 3 of this chapter.

IC 22-11-3.1-6 A contractor who on January 1, 1980, had a valid license....

A contractor who on January 1, 1980, had a valid license issued by a county, or a city or town within that county, is not required to reapply for a license, but all other provisions of this chapter are applicable to that contractor.

IC 22-11-3.1-5 If a contractor who is issued a license in a county having....

If a contractor who is issued a license in a county having a unified license bond allows his license to expire, he may be required by the county, or a city or town within that county, which issued the license to reapply for a new license.
Your agreement for the work on your house will be considered a contract and will be governed by contract law. You should review the terms of your contract to determine your obligations regarding payment. The following is general information regarding contract law:
Contracts are agreements that are legally enforceable. A contract may involve a duty to do or refrain from doing something. The purpose of a contract is to establish the terms of the agreement by which the parties have fixed their rights and duties. The existence of a contract requires an offer, an acceptance of that offer which results in a meeting of the minds, a promise to perform, a valuable consideration, a time or event when performance must be made, terms and conditions for performance, and performance, if the contract is "unilateral". A unilateral contract is one in which there is a promise to pay or give other consideration in return for actual performance. A bilateral contract is one in which a promise is exchanged for a promise. A contract may be express or implied. An express contract is one, whose terms are stated in words. An implied contract is one, the existence and terms of which are manifested by conduct. In most cases contracts can be either written or oral, but oral contracts are more difficult to prove and in most jurisdictions the time to sue on the contract is shorter. Contracts are mainly governed by state statutory and common law and private law. Private law generally refers to the terms of the agreement between the parties, as parties have freedom to override many state law requirements regarding formalities of contracts.
A legal action for breach of contract arises when at least one party's performance does not live up to the terms of the contract and causes the other party to suffer economic damage or other types of measurable injury. The injury may include any loss suffered by the plaintiff in having to buy replacement goods or services at a higher price or of a lower quality from someone else in the market. It may also include the costs and expenses incurred by the plaintiff in having to locate replacement goods or services in the first place. A lawsuit for breach of contract is a civil action and the remedies awarded are designed to place the injured party in the position they would be in if not for the breach.
Remedies for breach of contract include money damages, restitution and specific performance. A money damage award includes a sum of money that is given as compensation for financial losses caused by a breach of contract. Parties injured by a breach are entitled to the benefit of the bargain they entered, or the net gain that would have accrued but for the breach. The type of breach governs the extent of damages that may be recovered. If the breach is a total breach, a plaintiff can recover damages in an amount equal to the sum or value the plaintiff would have received had the contract been fully performed by the defendant, including lost profits. If the breach is only partial, the plaintiff may normally seek damages in an amount equal to the cost of hiring someone else to complete the performance contemplated by the contract. Restitution is a remedy designed to restore the injured party to the position occupied prior to the formation of the contract. Parties seeking restitution may not request to be compensated for lost profits or other earnings caused by a breach. Instead, restitution aims at returning to the plaintiff any money or property given to the defendant under the contract. Specific performance is an equitable remedy that compels one party to perform, as nearly as practicable, his or her duties specified by the contract. Specific performance is available only when money damages are inadequate to compensate the plaintiff for the breach.
A release gives up a right, such as releasing one from his/her liability for harm or damage that may occur from performing under a contract, or participating in an activity. A release generally gives up the signing party's (the releasor's) right to sue the person or entity requesting the release (the releasee). The terms of the release document govern the scope of actions that the released party is immune from liability for.


Please see the information at the following links:

http://www.clsi.com/contractor_license_indiana.htm
http://www.contractors-license.org/
http://definitions.uslegal.com/r/releases/
http://definitions.uslegal.com/c/contract-law/
http://definitions.uslegal.com/c/contracts-breach-of-contract/

01/02/2009 - Category: Contractors - State: AZ #14904

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