Am I obligated to pay for work that was done if I found out after that the company was unlicensed? 6 Answers as of December 27, 2013

I had services rendered by an unlicensed security company. There were no issues with the work provided but later I found out that the company was not properly licensed. Am I obligated to pay for work that was performed?

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Barton Barton & Plotkin
Barton Barton & Plotkin | Maurice Ross
In some situations, the unlicensed company could not succeed if it brought suit against you for non-payment. The Court might conclude that the unlicensed company cannot use the offices of the Court to help it collect money for engaging in the unlicensed activity. But without knowing the specific facts and circumstances of your case, I would hesitate to conclude that you could successfully use this as a defense in an action by the company to collect the amount due. I would need to review the terms of your agreement with the contractor, review the precise nature of the services and work provided, and review the exact licensing requirements. Note that just because a company may be unlicensed for some purposes, this does not mean it cannot lawfully engage in activities that fall outside the normal scope of the licensing requirements. Most importantly, you admit that the work was satisfactory, and you have benefited from it. Furthermore, I would be wary of your conclusion that the company was not "properly" licensed. It is quite possible that the work that was conducted for you did not require a licensed contractor or security company. In any event, most courts would be very reluctant in a situation like this to allow you to avoid payment. This is because you cannot show any actual damages that you suffered as a result of the fact that the work was conducted by an unlicensed contractor. Your remedy should have been to file a complaint with the state licensing authority, but withholding payment is not, in my view, appropriate in most situations like this. This could become quite messy if you do not pay. My strong advice for you is to retain legal counsel to negotiate a settlement. If you were not harmed by the licensing situation, then why should you get a windfall benefit?
Answer Applies to: New York
Replied: 12/27/2013
WILLIAM L SANDERS, ATTORNEY AT LAW | William L. Sanders
I do not know the answer to your question with certainty. Generally, in GA, you can not use something like that as a defense, unless it was the proximate cause of actual damages that you suffered, as a result of their lack of license. You would not have a fraud claim, unless they represented that they were licensed, knew you would rely on that mis-representation, you in fact did rely on that representation, and suffered damages because of that misrepresentation. However, one could argue that you failed to exercise due diligence yourself.
Answer Applies to: Georgia
Replied: 12/27/2013
Law Office of Richard Winkler | Richard Winkler
If there were no issues with the installation, you might seek a reduction in the cost but you will not be able to walk away scot-free. That is obviously an unfair resolution you have suggested.
Answer Applies to: Rhode Island
Replied: 12/27/2013
Musilli Brennan Associates PLLC
Musilli Brennan Associates PLLC | John F Brennan
I would think yes, their problems are theirs with the regulatory authorities. That you got what you wanted and are satisfied with the work should tell you the regulation (and additional cost it would have visited upon you) was unnecessary. That you got the benefit for your bargain creates a moral, and most probably legal, obligation to pay for it.
Answer Applies to: Michigan
Replied: 12/27/2013
Fox & Fox, S.C. | Richard F. Rice
Most likely yes.
Answer Applies to: Wisconsin
Replied: 12/27/2013
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