Construction Law

An Unlicensed Contractor Can?t Bring Suit to Enforce a Contract Over $30,000

By Ryan McCabe

The South Carolina Supreme Court held in W & N Constr. Co. v. Williams that the contract between an unlicensed general contractor and owner was void and unenforceable under South Carolina law. 322 S.C. 448, 472 S.E.2d 622 (1996). S.C. Code Ann. § 40-11-10, 40-11-100, and 40-11-290  make it illegal for a general contractor without a license to undertake construction in excess of $30,000. 

In this case, the general contractor lost its license five years prior when it failed to pay taxes. Subsequently, the contractor entered into an agreement to perform $60,000 worth of commercial work for the owner. After completing the agreed upon work, the contractor filed a mechanics lien action to collect the unpaid balance of $30,481.89. Because this amount exceeded $30,000, the South Carolina Supreme Court refused to uphold the contract. 

The court based its rationale on the policy implications underlying the relevant licensing statutes. In short, the statutes exist to protect the public and it would be unjust to allow unlicensed contractors to circumvent these licensing requirements, even when that means voiding an otherwise valid contract.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Full post as published by The South Carolina Construction Law Blog on September 13, 2010 (boomark / email).