Contracts & ExecutionQuestion 850 of 1605
Under California Contractors State License Law, an unlicensed person who performs work requiring a license generally faces which severe contract-related consequence?
a.Full payment regardless of licensure
b.The inability to bring or maintain a lawsuit to collect compensation for the work
c.Automatic doubling of the contract price
d.A guaranteed right to arbitration
Explanation
Business & Professions Code §7031 bars an unlicensed contractor from bringing or maintaining any action to recover compensation for work that required a license, and can even require disgorgement of amounts already paid. This is one of the harshest contract consequences in the license law, making proper licensure essential to enforce payment rights. It does not double the price, grant arbitration rights, or guarantee payment; instead it strips the unlicensed party's ability to sue for compensation.
Law Reference: Business & Professions Code §7031Practice all 1605 questions free — no signup required.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)