In most states, an unlicensed contractor cannot enforce a construction contract against the project owner. This includes suing for payment under the contract. The policy is to protect the public from shoddy work performed by unqualified constructors.
It comes as a surprise that a North Carolina appeals court has allowed an unlicensed contractor to sue an architect and an engineer for economic losses allegedly caused by negligent performance of their professional responsibilities. The court had a persuasive rationale, however, because the protection of the public was not involved. The only parties that would benefit from barring the suit would be the allegedly negligent design professionals.
The other case in this issue involves a default termination for failure to make adequate progress. The government contracting officer wrongfully concluded the contractor had no reasonable likelihood of timely completion. The contracting officer understated the percentage of contract completion and failed to consider the contractor’s description of how it would deploy the necessary resources to the project.