Who is a “Contractor” as Used in “Unlicensed Contractor”?

A recent Georgia Court of Appeals case established a rule concerning the effect of an unlicensed contractor failing to disclose that he is unlicensed. In Fleetwood v. Lucas,[1] the contractor was hired by the homeowners to perform renovations on two homes. One of the projects went over budget, and the homeowners failed to pay the remaining balances on both projects. Following their failure to pay, the contractor sued the homeowners for breach of contract, and the jury delivered a verdict in his favor. The homeowners appealed on the grounds that the contractor was barred from bringing suit because the contractor did not have a license to perform the work.

Generally, if a contractor does not have a residential or general contractor’s license but performs work when a license is required, the contract is unenforceable. O.C.G.A. § 43-41-17(b). However, under O.C.G.A. § 43-41-17(g), a contractor may perform repair work without a license if the contractor discloses that he does not have a license, and the work does not affect the structural integrity of the project. In this case, the contractor failed to disclose that he did not have a license.

In response, the contractor argued that he was not a “contractor” within the meaning of O.C.G.A. § 43-41-2 because he bore no responsibility for any contractual risk to the homeowners. Despite the language of the statute, the Court liberally construed the definition of “contractor” to further the legislative intent of protecting property owners. The Court declined to interpret O.C.G.A. § 43-41-2 to mean that “a person is a contractor only if he has contractual risk to the owner for the performance and cost of the construction.”

[1] 840 S.E.2d 720 (2020)