SW Legal studies in Business

Unlicensed Builder Cannot Enter into Valid Construction Contracts
Description

Appeals court held that an unlicensed home builder cannot sue for breach of contract because it was against state law for him to try to enter into a construction contract for more than $10,000 when he did not have a home builder license.

Topic Contracts
Key Words

Construction; License; Breach

C A S E   S U M M A R Y
Facts

The Riedls contracted with King Home Services, owned by Jim King, to do work on their house. They paid $14,075 for some, but not all, of the work specified in the contract. The Riedls were unhappy with the work and sued, alleging that King damaged their home. King counterclaimed for breach of contract and unjust enrichment. The trial court dismissed King’s claims and transferred the Riedls’ claims to small claims court. King appealed.

Decision

Affirmed. King undertook to do construction work for more than $10,000 but was not a licensed contractor. As such, he was in violation of state law. He cannot evade the licensing requirement by claiming that the subcontractors were not under his control since he was the one who hired them. He cannot claim that the contract was actually a series of smaller contracts for less than $10,000 since he accepted several payments for less than $10,000. There was clearly an intent to enter into a contract for more than $10,000. King cannot bring a claim for breach of contract since he was barred from undertaking such work without a license. He cannot evade the state requirement to have a home builder license to be able to enter into construction contracts by claiming that he should collect on the theory of unjust enrichment.

Citation King v. Riedl, ---So.3d--- (2010 WL 3075256, Ct. App., Ala., 2010)

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