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When does our hobby shop need a contractor liscense?

12K views 76 replies 47 participants last post by  AlaskaGuy 
#1 · (Edited by Moderator)
I have had a recent client become a disaster. She canceled half of the work that was put on the contract and refuses to pay for the thousands of dollars worth of copper I bought. The deposit paid for the work I did do, but not the remaining material. She is now taking me to small claims court saying she is required her money back because I do not have a contractors license. I am in school and do not promote myself as a contractor, but do require my clients to sign a contract for the protection of both of us. Most of the big woodworkers in my area do not have a contractors license. I do want to make money through my woodwork, but am not trying to turn it into a big business. Should I be scared? Does she have an argument? Where is the point that a small shop needs to become licensed?
Thanks Guys
 
#3 ·
Promote yourself as an artisan with whom she contracted for the work. They do not require licenses because there is no government control on "Freedom of Speech" which all artisan can work under. You contracted for labor and materials which she agreed to?
 
#5 ·
You need to check your local regulations. I would imagine CA is fussier than some regarding the requirement for being licensed and insured. It also depends on what you're doing. I build doors, but I don't install them. I leave it up to the buyer to have their contractor do the work. Plus, if he screws it up, it's not my problem.
 
#6 ·
I have council. It is in writing, but as far as the contract she signed; she is in the wrong. That is only as the contract reads. I don't understand when it is necessary or do most of us just slide by without being noticed. There are major woodworkers here in California that don't have any license and never have a problem. I like the artisan idea. It seems the line is if your promoting yourself for profit. Which yes I get paid for my work, but not a lot and my main focus is school. I could never live off of my woodwork. I am just trying to be prepared for a solid answer.
 
#9 ·
I'm no lawyer, but here, if you attach anything to a wall you need to have a contractors license.

Regardless of whether you have the license or not, she contractually agreed to have you do said work for said amount.

I think she could probably get out of the contract,
but I doubt that she could get away without paying you for work performed.
As far as money you have spent on material, not really sure.
A lot will depend on the contract you wrote up that she signed, and how much of it is enforceable by law.

Again, not a lawyer, but I would think if you were contracting without a license that would be more of a problem with the contractors board than the client.
I'm sure your work would have had to be done to contractors laws/standards.
 
#11 ·
Contracting w/o a license is a Misdemeanor in Phoenix.

What she did reminds me of how some unscrupulous contractors hire undocumented workers and then call INS at the end of the day to avoid paying for the labor.

If indeed you need a license for the work you did, she could possibly argue that no legal contract existed since such contracting would be illegal under your local statutes.

I'm no lawyer, so this is not legal advice.
 
#12 · (Edited by Moderator)
Typically, a license is an agreement between a tradesman and a government agency. They're usually intended to ensure the tradesman complies with all applicable laws and building codes. And to provide a measure of protection for consumers/clients.

Typically, clients are not required by law to use licensed tradesmen. There are benefits to hiring licensed workers and there are risks to contracting unlicensed workers (and vice versa). Usually, the law leaves it up to the consumer to decide what benefits and risks they're willing to take on. Consumers are free to enter into contracts with unlicensed tradesmen and unlicensed tradesmen are free to enter into contracts with consumers.

A contract between a tradesman and a client is a different animal. It lays out what each party is agreeing to provide. The tradesman provides labor and materials to be delivered on a schedule. The client provides money, perhaps also on a schedule.

Unless your contract with the client stipulated that you had to be licensed, then there should be no connection, no relationship between your contact with the client and your licensed/unlicensed status.

However, it can depend on the nature of your work as well. If you're rewiring her house, or redoing the plumbing, for pay, then the law may require you to have an appropriate license. If you're planting flowers in her garden, or building her a bookcase, then the law most likely would not require you to be licensed.

As others have stated, things can be different from state to state, county to county, or even city to city, so local legal expertise should be your best source of information.
 
#14 ·
California law requires that anything over $500.00 in labor and materials (combined), requires a contractor license. You can't bid on anything over that amount unless you are licensed by the state of California to perform such work.
 
#15 · (Edited by Moderator)
You don't have to be a contractor to build
custom furniture.

I think you should be optimistic about things
because I don't see how she has a case and
if she actually does drag you into court, she'll
probably lose and in any case judgments are
difficult to collect.

That said, I would try once more to reason
with her, in writing, and offer to sell her
the material. She backed out for her own
reasons, and now she wants you to take
the loss.

You could also recycle the copper and offer
to pay her what you get for it. It's unfortunately
a lose-lose scenario. Usually with industrial
materials a substantial restocking fee is
charged when materials are returned. Retail
consumers aren't familiar with this business
practice.
 
#16 ·
Depends entirely on what you are doing, if you are building furniture you don't need to be a contractor. If you are remodeling her bathroom then you probably do need to be a contractor.

Deposits should always cover the cost of the materials so you don't get stiffed.

I think you should be worried because even if you are right, she can cost you money with court costs, lawyer fees etc.
 
#17 · (Edited by Moderator)
You don t have to be a contractor to build
custom furniture.

I think you should be optimistic about things
because I don t see how she has a case and
if she actually does drag you into court, she ll
probably lose and in any case judgments are
difficult to collect.

That said, I would try once more to reason
with her, in writing, and offer to sell her
the material. She backed out for her own
reasons, and now she wants you to take
the loss.

You could also recycle the copper and offer
to pay her what you get for it. It s unfortunately
a lose-lose scenario. Usually with industrial
materials a substantial restocking fee is
charged when materials are returned. Retail
consumers aren t familiar with this business
practice.

- Loren
Well there a lot of advice being given and we don't even know the scope of the work he'd doing. He seem reluctant to say. He says he has counsel so I don't know why he's asking a bunch of non lawyers these question.
 
#20 ·
I am in school and do not promote myself as a contractor, but do require my clients to sign a contract for the protection of both of us.

- WhiskeyCreek
The artisan angle may work. Not sure about the rules in California. It may be a stretch to say that you don't promote yourself as a contractor based on the website that promotes your work.

Your stuff looks beautiful, by the way. It's a shame that there are some people/clients that insist on acting like a-holes.
 
#21 ·
This is why I refuse to do work for anyone but me. It only takes one to make your PT make some money gig to go sideways. Sucks but in our current state of sue happy idiots this is what happens. Get a lawyerm, refuse to speak to her and let them deal with it. Drag it out forever.
 
#23 · (Edited by Moderator)
I don t see how building custom furniture requires a contractor license. Plumbing or remodeling or electrical work yes. I think if you produce a contract that she signed you would be on the winning side of this argument.

- dhazelton
Furniture doesn't attach to anything. No license required. The work he's doing hasn't been specified…
 
#24 ·
It is in writing, but as far as the contract she signed; she is in the wrong. That is only as the contract reads.

- WhiskeyCreek
I'm not in the US, so I can only comment on what I would suggest are general principles that I would think are similar.

I was taught "Offer + Acceptance = Contract". Generally, you are the one who makes the offer, with your terms attached, and she accepts the offer. There are sometimes situations where the offer is not legally valid, but they are not common. Failure to do due diligence is generally not one of them, though deliberate misrepresentation could be.

Once you have a contract, the next thing I was taught comes into play - RTFC (Read the … Contract). When you have a written contract, nothing applies except what "the contract reads". Prior verbal conversations etc. count for nothing.

A contract creates rights and obligations. She has the right to receive the goods, you have the obligation to deliver them. You have the right to be paid, she has the obligation to pay. There may be others, but these are the main ones.

It is when something comes up that is not covered by the contract that you have a problem. What that basically tells you is that your written contract, and the process you follow to enter into contracts, might need improvement. When this experience is over, sit back and think carefully about what you could have done up front to prevent it from happening, then do that in future.

The final thing that I was taught is that "when lawyers get involved, the only people who win are the lawyers." It is the best interests of both you and your client to resolve this without involving lawyers. Even if it costs you money, it is just the price of the lessons it teaches you.

As I said, these are general principles from outside the US. Hopefully they are helpful. but feel free to ignore if not.
 
#26 ·
FWIW, I believe lawyers aren't allowed in small claims court in California. Because the parties are representing themselves, small claims judges typically grant a little slack to both sides with respect to rules of evidence, procedure, etc.

Nevertheless, your lawyer should be advising you both on the case, and on how to make the best presentation. If he/she isn't, maybe you need to think about your choice of lawyers.
 
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