Licensing Issues and Contract Enforceability

january 2, 2018

Under Georgia law, if a contractor is not licensed for the type or scope of project contracted for, they cannot recover under the contract, either in law (breach of contract) or in equity (quantum meruit). In this regard, O.C.G.A. § 43-41-17(b) provides in part:

As a matter of public policy, any contract entered into on or after July 1, 2008, for the performance of work for which a residential contractor or general contractor license is required by this chapter and not otherwise exempted under this chapter and which is between an owner and a contractor who does not have a valid and current license required for such work in accordance with this chapter shall be unenforceable in law or in equity by the unlicensed contractor.

O.C.G.A. § 43-41-17 further provides:

[I]f a contract is rendered unenforceable under this subsection, no lien or bond claim shall exist in favor of the unlicensed contractor for any labor, services, or materials provided under the contract or any amendment thereto.

O.C.G.A. § 43-41-17 only affects the rights of an unlicensed contractor to enforce contract, lien or bond remedies. It does not apply to appropriately licensed subcontractors who may have contract claims as claims for quantum meruit (claim based on the value of the work completed) directly against the owner.

The same rule applies to electrical, plumbing and conditioned air contractors pursuant to O.C.G.A. § 43-14-8(f). JR Construction/Electric, LLC v. Ordner Construction Company, 294 Ga. App. 453 (2008).