Oregon Construction Contractors (CCB) Practice Test

What happens if a contractor's license lapses during construction?

1. The contractor may be fined

2. The contractor may lose its right to any legal remedy

3. The contractor can continue working under a temporary license

4. The contractor's license is automatically renewed

The correct answer is: The contractor may lose its right to any legal remedy

When a contractor’s license lapses during a construction project, the contractor may lose their right to any legal remedy. This consequence stems from the principle that, in many jurisdictions, including Oregon, a valid contractor's license is a prerequisite for pursuing legal claims related to construction activities. If a license is expired, the contractor may not be able to enforce contracts, seek payment for services rendered, or claim damages for breaches. This is intended to ensure that only duly licensed contractors are able to operate in the industry, thereby protecting consumers and maintaining standards. The other potential consequences associated with a lapsed license, such as being fined or engaging in work with a temporary license, do not typically negate the primary impact on the contractor's legal standing. Additionally, an expired license does not automatically renew; contractors must take steps to reinstate their licenses to regain legal protections. Understanding this aspect of construction law is essential for contractors to maintain compliance and protect their rights and interests throughout their projects.