Business & LicensingQuestion 1378 of 1632

Under the disgorgement provision of the license law, what may a customer who hired an unlicensed contractor do?

a.Withhold future payments, but keep no right to money already paid
b.Recover all compensation already paid for the unlicensed work
c.Recover only the payments above the $1,000 exemption amount
d.Recover nothing once the work is finished and put to use

Explanation

B&P §7031(b) lets a person who used the services of an unlicensed contractor sue to recover all compensation paid for the work, and §7031(a) separately bars that contractor from suing for anything unpaid. (a) is the set-off misconception: the remedy reaches money already handed over, not merely money still owed. (c) treats the §7048 $1,000 threshold as a deductible, but it is a test of whether a license was needed at all, and a job that needed one gives no credit for the first $1,000. (d) is the good-work defense the courts have rejected; the only narrow escape is the substantial-compliance showing in §7031(e).

Law Reference: B&P Code §7031(b) / §7031(e)

This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →

Practice all 1632 questions free — no signup required.

Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →

Related questions on this topic

Last reviewed: · editorial process

PrepPass team · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)
Report