Utah Contractor Practice Exam

If a contract is made between a contractor and an unlicensed person who is in violation of the law, who is liable?

1. The contractor

2. Both the contractor and the unlicensed person

3. The unlicensed person

4. Only the unlicensed person if he didn't notify the contractor

The correct answer is: Both the contractor and the unlicensed person

In situations where a contract is made between a licensed contractor and an unlicensed person, the liability is typically shared between both parties because the contract is considered illegal. The unlicensed person is in violation of licensing laws and is engaging in activities that require a license, thereby rendering the contract unenforceable. From the contractor's perspective, even though they are licensed, entering into a contract with someone who is unlicensed puts them at risk because it violates statutory regulations. The law aims to protect the public by ensuring that only qualified individuals can perform certain types of work, primarily for safety and quality assurance reasons. As such, since both parties are involved in the creation of the illegal contract, they can be held liable for the implications arising from that agreement. This scenario emphasizes the importance of ensuring that all parties involved in a construction project comply with licensing requirements to protect not only the public but also the interests of the contractors themselves. In contrast, if the contractor had chosen to work solely with licensed individuals, they would minimize exposure to such liabilities.